 In this presentation, we will take a look at multiple choice questions related to budgeting going through the questions and then practicing test-taking skills with them. First question, budget figures are developed A. First, a word from our sponsor. Yeah, actually we're sponsoring ourselves on this one because apparently the merchandisers, they don't want to be seen with us. But that's okay whatever because our merchandise is better than their stupid stuff anyways. Like this CPA thinking cap for example, CPA thinking CAP, you see what we did with like with the letters and this CPA thinking cap is not just for CPAs either. Anyone can and should have at least one possibly multiple CPA thinking caps. Why? Because based on our scientific survey of five people, all of whom directly profit from the sale of these CPA thinking caps, wearing this CPA thinking cap without a doubt according to the survey, increases accounting productivity tenfold. Yeah, at least. Apparently the hat actually channels like accounting energy from the quantum field ether directly into your head, allowing you to navigate spreadsheets faster. It's kind of like how in like the matrix when Neo learns kung fu or at least that's what the scientific survey saying. So get one because the scientific survey participants could really use some extra cash. If you would like a commercial free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. From the top down, B from the bottom up, C by the C F O D by the C E O E based on last year's numbers. Let's go through this again using the process of elimination. Budget figures are developed a from a top down. So if we might see that say I'm not even sure what we're talking about top down and then B says from a bottom up. So again, we might say I'm not really sure on those two and then C says by the C F O, which is a chief financial officer. That sounds kind of reasonable possibly and E says by the CEO chief executive officer office. Another big person in the company seems kind of reasonable and then he says based on last year's numbers. And we know that that's kind of the starting point of a budget. So the first one I'm going to remove is is going to be here. However, because anytime that a budget process in a formal in a question says it's only based on the last year's numbers. It's not normally going to be the answer. It's got to qualify that somewhere. The last year's numbers are the starting point. They aren't we can't just take last year's numbers and roll them forward. It doesn't. That's not how the budgeting process is going to work, at least for a book problem. So it's not going to be E. So let's go through this again. Budget figures are developed either from a top down or bottom up. And then we've got the C F O or the C E O. Now of these four, these two, the C F O and the C E O would indicate that all the figures are developed by one person in the organization, the C F O or the C E O. As if they just kind of like one person is going to win a big company. They're going to know how to do the whole entire budget with no help. That's that's not going to happen. That's not the way it's going to work. So it's not going to be these and notice that the C F O and the C E O also line up to what we would think of as a top down approach. In other words, we're talking about the structure of the organization being, you know, these are the big guys at the top making the decision top down. And then they just communicate that decision. And, you know, it's kind of like the coach making the plan without discussing it with any of the players or whatever. And then just telling the players what to do from a top down approach. And so a then would line up with either C F O or C E O you would think as well. So and really what we want here, typically we're thinking that the budget for a larger company is often going to be a bottom up type approach. Again, a very small company is probably going to be completely run by like a, it's almost like a dictatorship, right? Because it's a small company and the one owners doing doing is just running the thing. They're the one with the vision. They're the one with the implementation of it. But the larger the company gets when you get a large company with different types of departments, of course, then it's too big for one person to just come up with the budget. The departments have to come up with the budget because they're the ones that are running in the numbers. It has to be decentralized in some kind of way. So when we get a larger company, we've got to go from the bottom up type of budget. We got to go and get the numbers from the people in the departments that are there and then put those together in a bottom to top kind of structure. So final answer B budget figures are developed be from the bottom up. Next question. Preparing budgets for each of several future periods and then revising those budgets as each period is completed is either a participatory budgeting B adjustable budgeting C strange budgeting D continuous budgeting and E master budgeting. Alright, let's go through this again using the process of elimination. Preparing budgets for each of several future periods and then revising those budgets as each period is completed is so we got the full budget and then we're going to revise them basically as we go a participatory budget. I mean, it might sound reasonable. I'll keep that for now. B says adjustable budget. That sounds kind of reasonable like what we're doing. C says strange budget. It does sound strange, but I doubt we named it the strange budget. So that's probably not and then D says continuous budget. Again, that kind of sounds like what we're doing. It's kind of like a continuous thing. And E says master budget. And that's kind of what we've been looking at. So I'll keep all of these and go through this again. Preparing budgets for each of several future periods and then revising those budgets as each period is completed is. Now, of those note that the participatory budget doesn't sound reasonable. I think all budgets are going to be kind of participatory because they're going to try to communicate with the company, but I don't think that's what it's going to be called. E is the master budget. And this one seems to be some type of deviation from the normal master budget that we've been talking about. So I don't think it's E. And then the other kind of unusual budget names we would have adjustable budgeting, continuous budgeting. Those both kind of indicate just by the name of it what we're doing here in some way. The continuous budgeting is actually the term that possibly we recognize that's the one that it's actually called. Final answer. Preparing budgets for each of several future periods and then revising those budgets as each period is completed is. D. Continuous budget.