Question

Which one of the following factors will most likely have a negative impact on the manager's motivation with regards to the budget?

	a.	The budget targets are challenging but attainable.
	b.	The manager's input was highly regarded throughout the budget setting process.
	c.	The budget includes some budgetary slack.
	d.	The budget provides too little scope for managers to perform their duties.

Which of the following is a potential consequence of the authoritarian style of budgeting?

	a.	Unattainable targets.
	b.	Demotivation of employees.
	c.	Unit managers taking very little ownership of the budget.
	d.	All of the options listed.

1. Which one of the following is the name for an interrelated set of budgets for a future period?

   	a.	A master budget.
   	b.	A combined budget.
   	c.	A program budget.
   	d.	An assembly of budgets.

2. Pink Skies Ltd has a quick ration of 1.5:1 with current liabilities of $50,000 and inventory of $15,000. Calculate current assets.

   	a.	$25,000
   	b.	$50,000
   	c.	$75,000
   	d.	$100,000

Answer 1

Solution 1) Correct Answer d) The budget provides too little scope for managers to perform their duties. With little scope for managers to perform their duties, it will have negative impact on manager's motivation Reason Solution 2) Correct Answer Reason : d) All of the options listed In authoritarian style of budgeting, management sets up the budget without consultation with the employees Hence, unattainable targets, demotivation , little ownership of budget among the unit managers. Solution 3) Correct Answer Reason : a) A master budget A master budget is comprised of many interrelated set of budgets Solution 4) Quick Ratio Current Liabilties Inventory Current Assets $ $ ? 1.5 : 1 50,000 15,000 Quick Ratio = (Current Asset - Inventory) / Current Liabilties Current Asset = (Quick Ratio x Current liabilities) + Inventory 1.5 x $ 50,000 +$ 15,000 $ 75,000 $ 15,000 $ 90,000 The correct Answer is $90,000 but the option is not mentioned in the given choices

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