The Use of Budgets in a Vertically Integrated U-Form Organization

question 45

True/False

The use of budgets in a vertically integrated U-form organization can lead functional managers to overemphasize short-term behavior that is easy to measure and underemphasize longer-term behavior that is more difficult to measure.

---

Definitions:

Perpetual Inventory System

An automated inventory management system which promptly registers inventory transactions during sales or purchases through digital point-of-sale systems and enterprise asset management software.

Purchases Returns

Transactions involving the return of goods previously bought to the supplier, often due to defects, inaccuracies, or other reasons, leading to a refund or credit note.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit and are due within a short period, typically less than a year.

Perpetual Inventory System

Inventory accounting method that uses computerized point-of-sale and enterprise asset management software to immediately track sales or purchases of inventory.