Managers May Intentionally Build Slack into the Budget

question 129

Multiple Choice

Managers may intentionally build slack into the budget

• A)because of certainty about the future.
• B)to make their performance look worse.
• C)to have the resources they need in the event of budget cuts.
• D)it makes the overall budget more realistic.

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Definitions:

Sources And Uses

A statement or document outlining where funds are coming from (sources) and how they are spent or invested (uses) in the context of business financing or project financing.

Credit Purchases

Transactions where goods or services are bought using credit instead of immediate cash payment, impacting liabilities and cash flow.

Receivables Turnover

This is a financial ratio that measures how efficiently a company collects debts from its customers, indicating how many times receivables are converted into cash in a period.

Interval Measure

The interval measure is a liquidity metric that estimates how long a company can operate using its current liquid assets without needing additional financing.