Exam 12: Budgeting and Performance Measurement

A major advantage of activity-based costing (ABC) is that it reduces unit cost distortions arising from overhead allocations that often occur using traditional cost accounting systems.

Budgeting is an important part of a manager's planning and control responsibilities in both public and private organizations.

Under GASB standards, every government, regardless of its size, is instructed to prepare a cash budget for each month of the fiscal year.

What budgeting approach requires justification for the inclusion of every activity each year? Briefly describe this method and how it can be effective.

Government budgets must be voted upon by citizens for approval in an annual general election.

Which of the following statements is not consistent with the GASB's "Budgeting, Budgetary Control, and Budgetary Reporting Principle"?

A common approach to budgeting line-items whereby the current year's budget is constructed by adding or subtracting amounts expected to be required by line items is:

Which of the following statements regarding costs under federal awards is not True?

The GASB identifies which of the following three broad categories of service efforts and accomplishments (SEA) measures:

Public hearings must be held to provide adequate opportunity for citizens' input to government budgets, prior to legislative adoption of the budget.

Service efforts and accomplishments (SEA) reporting helps citizens, elected officials, appointed officials, investors and creditors, and other interested parties evaluate the government's performance in the absence of a "bottom line" measure such as exists for for-profit entities.

The type of budgeting that relates input of resources to output of services is zero-based budgeting.

Popular budgeting approaches employed by governments include incremental budgeting, performance budgeting, program budgeting, planning-programming-budgeting systems, and zero-based budgeting.

All of the following are objectives of activity-based cost (ABC) accounting in government except:

Which of the following might appropriately be termed an outcome indicator for a police department that reports service efforts and accomplishments (SEA) indicators?

Cash planning and budgeting are important in government because the timing of cash inflows often does not necessarily coincide with the timing of cash outflows.

Which of the following statements regarding service efforts and accomplishments (SEA) is not True?

Governments receiving federal grants and contract funds are expected to have an accounting information system with adequate internal controls that can deliver reliable information to compare the actual amount spent with budgeted amounts.

Under federal guidelines, when is a cost considered reasonable?

Total quality management (TQM) seeks to continuously improve an organization's ability to meet or exceed customers' demands, and, as such, is useful in a government setting as well as a business setting.