Which Is True of Budgets

question 158

Multiple Choice

Which is true of budgets?

• A) They are voted on and approved by stockholders.
• B) They are used in the planning but not in the control process.
• C) There is a standard form and structure for budgets.
• D) They are used in performance evaluation.

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Definitions:

Sales on Credit

Sales on Credit refer to transactions where the buyer is allowed to pay for goods or services at a later date, making the sale based on trust that payment will be made in the future.

Lockbox Plan

A cash management tool in which incoming cheques for a firm are sent to post office boxes rather than to corporate headquarters. A local bank will collect the contents of the lockbox and deposit the cheques into the company’s local account.

Net Positive Float

The excess of funds available for use due to the time difference between when a check is deposited and when it clears.

JIT System

Just-In-Time System, an inventory management strategy that aligns raw-material orders directly with production schedules.