1- In the budgeting process, if an organization’s executives want input from low
ID: 375094 • Letter: 1
Question
1- In the budgeting process, if an organization’s executives want input from lower-level managers about those managers’ expectations and needs for the coming year, then which approach would be best?
A- Top-down budgeting
B- Zero-based budgeting
C- Bottom-up budgeting
2- You are the owner of Patio to Go, a small business specializing in patio furniture. Last week, you found out that the owner of Arches & Arbors is looking for a buyer for his business.
Which of the following items would be included in Arches & Arbors’s liabilities? Check all that apply.
A- Garden arches in stock
B- Employee payroll obligations
C- Lumber purchased for building arbors
D- Mortgage on existing store property
3- In order for the deal to go through, you need to compare the owner’s current assets and (1) by looking at his (2) . But because you also want to see the company’s (3) , or profit and loss, for a one-year period, you also ask to see his (4) .
1- Profit margin OR liabilities OR inventory turnover OR profitability
2- owner's equity OR balance sheet OR activity ratio OR income statement
3- leverage OR net income OR capital budget OR inventory turnover
4- liquidity ratio OR owner's equity OR balance sheet OR income statement
Explanation / Answer
1.
If the top level of an organization wants inputs from the middle and lower level managers to know the budget expectancy of their level, then the organization’s top-level management should directly approach the middle and lower levels and then based on their requirement, the top-level management should prepare the budget.
Thus, the correct option is bottom-up budgeting.
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