What Is "Budgetary Slack

question 114

Multiple Choice

What is "budgetary slack"?

• A)It is the tolerance that is built into budgets to recognize that actual results will not match budgeted projections exactly.
• B)It is the process where managers intentionally underestimate budgeted revenues or overestimate budgeted expenses in order to make it easier to achieve budgetary goals.
• C)It is the amount that actual results vary from budgeted projections as reported at the end of the budget period.
• D)It is the process where upper management underestimates budgeted revenues or overestimates budgeted expenses in order to motivate lower management.

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Definitions:

Reporting Period

The specific span of time covered by financial statements, typically a fiscal quarter or year, over which a company reports its financial performance.

Footnotes

Additional notes provided in financial statements offering more detailed information about the accounts and policies applied.

Limitations

Restrictions or constraints that affect the scope, effectiveness, or applicability of something.

Balance Sheet

A business's financial report that lists its holdings, obligations, and the value belonging to its shareholders at a specific time.