100.One advantage of participatory budgeting is that it frees up upper management for more important tasks.
True False
101.Vector Company seeks input from salespeople regarding the number of units they believe they can sell during the upcoming budget period. This is an example of participative budgeting.
True False
102.In a participative budgeting system, budget information flows in both directions, from bottom to top, and from top to bottom.
True False
103.If a budgeting system is designed correctly, top management will not have to get involved in the process.
True False
104.The first budget prepared in a master budget is the cash receipts budget.
True False
105.A schedule of cash receipts is often prepared in conjunction with the sales budget.
True False
106.The marketing department is primarily responsible for establishing the sales forecast.
True False
107.If a company purchases its inventory on account, it need not prepare a schedule of cash payments for inventory purchases.
True False
108.Although only 20 units are on hand at the beginning of the year, World Company plans to sell 100 units during 2014. Assuming the company desires an ending inventory of 10 units, it should plan to purchase 110 units.
True False
109.Interest expense is not included in the selling and administrative budget because a company cannot estimate interest expense until it prepares the cash budget and makes borrowing projections.
True False