1) Budgetary slack is created when : A) When the difference between actual and b

Question

1) Budgetary slack is created when:

            A) When the difference between actual and budgeted amounts are accidental

            B) When the difference between actual and budgeted amounts are based on unforeseen events.

            C) When the difference between actual and budgeted amounts are the result of deliberately introduced bias in the budgetary process.

            D) When the difference between actual and budgeted amounts are the result of management's inability to be clairvoyant.

2) A budgeting system that allows individuals who are affected by the budget to have input into the budgeting process is called:

            A) mandated budgeting

            B) zero-based budgeting

            C) incremental budgeting

            D) participative budgeting

Explanation / Answer

Hi,

Kindly ignore my previous answer. I misinterpreted the question. Please find the correct answers as follows:

Part A:

Option C (When the difference between actual and budgeted amounts are the result of deliberately introduced bias in the budgetary process) is correct.

Part B:

Option D (Participative Budgeting) is correct.

Thanks.

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