237) A formal written statement of management\'s plans for the future, expressed

Question

237) A formal written statement of management's plans for the future, expressed in financial terms, is called a budget.
a. true
b. false

238) Budgets are normally used only by profit-making businesses.
a. true
b. false

239) Armando Company owns 15,000 of the 50,000 shares of common stock outstanding of Tito Company and exercises a significant influence over its operating and financial policies. The investment should be accounted for by the
a. market method
b. equity method
c. cost or market method
d. cost method

240) The objectives of budgeting are (1) establishing specific goals for future operations, (2) executing plans to achieve the goals, and (3) periodically comparing actual results with these goals.
a. true
b. false


241) When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.
a. true
b. false

Explanation / Answer

237) A formal written statement of management's plans for the future, expressed in financial terms, is called a budget.
a. true


238) Budgets are normally used only by profit-making businesses.

b. false

239) Armando Company owns 15,000 of the 50,000 shares of common stock outstanding of Tito Company and exercises a significant influence over its operating and financial policies. The investment should be accounted for by the

b. equity method


240) The objectives of budgeting are (1) establishing specific goals for future operations, (2) executing plans to achieve the goals, and (3) periodically comparing actual results with these goals.
a. true



241) When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.
a. true

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