A Master Budget Forces Managers to Examine the Business as They

question 209

Multiple Choice

A master budget forces managers to examine the business as they plan,so they can ________.

• A) detect inaccurate historical records to avoid errors in budgets
• B) set expectations against which actual results can be compared
• C) complete the budgeting task on time
• D) ensure that only financial risks and opportunities are incorporated

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Definitions:

Collection Float

The time period between when a check is deposited and when the funds become available in the recipient's account.

Net Float

Net float is the difference between the amount of checks written by a company and the amount that has been cleared and charged to the company's account, affecting its available balance.

Collection

The process of obtaining payment on outstanding accounts or the grouping of specific items, as in art or stamps.

Disbursements Float

The time difference between when a payment is made by a firm and when the funds are actually withdrawn from the firm's bank account.