 In this presentation, we will take a look at multiple choice questions related to a budget team going through the questions and then practicing test taking skills with them first question 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 but that's okay Whatever because our merchandise is is better than their stupid stuff anyways Like our accounting rocks product line if you're not crunching cords using Excel you're doing it wrong a must-have product because the fact as everyone knows of accounting being one of the highest forms of artistic expression Means accountants have a requirement the obligation a duty to share the tools necessary to properly channel the creative muse and The muse she rarely speaks more clearly than through the beautiful symmetry of spreadsheets So get the shirt because the creative muse she could use a new pair of shoes If you would like a commercial free experience consider subscribing to our website at accounting instruction Dot-com or accounting instruction dot think of it dot-com all of the following are necessary for budgets, but a attainable goals be communication with employees affected see evaluations of budgets and performance D awareness of limitations of budget and e all budgeted amounts must be spent to ensure that budgets aren't reduced For the next period. Let's go through this again using the process of elimination All the following are necessary for budgets, but so we're looking for the exception to the rule all of them being applicable except which one a attainable goals So attainable goals all the following are necessary for the budgeting. I would think attainable goals is something we want So I would think that would be There B says communication with employees affected. So a since a is there. I'm going to cross it out Communication with employees again, you would think that's something that you'd want to do But maybe it's not mandatory. I would keep that for now see says evaluations of budgets and performance And that's kind of what we do in the budgeting process. So I think that would be reasonable D says awareness of limitations of budgets We probably want to have that as well And I'll just keep that for now But he says all budgeted amounts must be spent to ensure that budgets aren't reduced for the next period And that doesn't sound that sounds a little kind of weird to do that That might be actually done in practice, but it doesn't see it doesn't seem like the proper way of doing things So let's go through this again. We'll read through this and go through them one more time All the following are necessary for budgets, but so which one isn't necessary now some of these we might say hmm I'm not sure if it's totally necessary or not But we're actually looking for the one that doesn't fit and possibly the one that would be improper or not the most Proper thing so communication or B says communication with employees affected You could argue it's not necessary, but I would think that'd be nice. It probably a good be a good practice I would think that would be part of it C says evaluations with budgets and performance You probably want to evaluate the budget to the actual performance I would think that would be part of the budgeting process D Awareness of limitations of budgets again, maybe not necessary you can argue But yeah, that would be good to have an idea of that to put the budget in place E says all budgets amount must be spent to ensure that budgets aren't reduced for the next period That doesn't sound proper the proper format So of the ones that don't really apply this one sounds like kind of one of those things that might happen But those are one of the problems that we need to be aware of not one of the necessities of budgeting So final answer we're going to say is E one more time all the following are necessary for budgets But E all budgeted amounts must be spent to ensure that budgets aren't reduced for the next period next question Which is not a result of following a good budgeting process a better decision-making process be better evaluations see improve coordination with business activities D guaranteed future profits and E better communication of Management's plans. We'll go through this again using the process of elimination Which which is not a result of following a good budgeting plan a better decision-making process We would hope so that maybe that's probably that's kind of what we're doing here. So be better evaluations We're going to be comparing the budget versus the actual so I would think that that would improve our future in value Evaluations hopefully see says improve coordination with business activities And I probably I would think so. I'll keep that open for now. D says guaranteed future profits Obviously, we're going to hope the budget for future profits, but does it guarantee future profits? I don't know. I'll keep that open for now. E says better communication of management's plans Hopefully the budget does that so I would think that the budget would do that. We'll keep what with C and D go through this again Which is not a result of a good budgeting process either see improve coordination of budget activities or D Guaranteed future profits Now you'll note that many of these have like better decisions better evaluations better this better that and then one of these items has this word Guaranteed so if you see any like ultimate word in an answer like that That says this is always the case. This is guaranteed to happen This never happens or this always happens. It only takes one little time For that not to be a true situation for that entire statement to be incorrect So you want to be very careful whenever you see those absolute words probably the case Where that might be an answer in this case because nothing's guaranteed You got guaranteed future profits anything you can ask anything and say well this guarantees future profits Well, no, it doesn't nothing nothing guarantees future profits So basically you don't even have to anything after guaranteed is pretty much not It's gonna disqualify that so we're gonna go with D here final answer Which is not a result of following a good budgeting process D guaranteed future profits