In the Budgeting Process

question 33

Multiple Choice

In the budgeting process,

• A) the local currency should be used to set the budget and monitor performance.
• B) the local currency budget should be translated into dollars at the projected exchange rate.
• C) actual results should be translated into dollars at the same rate at which the budget was set.
• D) translated budgets allow management to look at the same numbers that shareholders use.

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Definitions:

Surplus (Deficit)

The financial position that results when total revenues exceed (surplus) or are less than (deficit) total expenses.

Consolidated Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity of a parent company and its subsidiaries as one entity.

Cash

Money in the form of coins or banknotes, especially that held by an organization as its liquid assets.

Preference Shares

Equity securities that have preferential rights compared to common shares, often regarding dividends and asset distribution.