Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Which of the following is a potential negative outcome of budgeting?

Increased accuracy in financial forecasting

Improved coordination between departments

Budgetary slack, where managers intentionally overestimate expenses or underestimate revenues

Enhanced employee motivation

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Verified step by step guidance

Understand the concept of budgeting: Budgeting is a financial planning tool used by organizations to allocate resources, forecast revenues and expenses, and set financial goals. It helps in decision-making and performance evaluation.

Identify the potential negative outcome mentioned in the problem: The term 'budgetary slack' refers to the practice where managers intentionally overestimate expenses or underestimate revenues in their budgets to make targets easier to achieve.

Analyze why budgetary slack is considered a negative outcome: Budgetary slack can lead to inefficiencies, misallocation of resources, and reduced accuracy in financial forecasting. It may also undermine the credibility of the budgeting process.

Compare budgetary slack with other outcomes listed: Increased accuracy in financial forecasting, improved coordination between departments, and enhanced employee motivation are generally positive outcomes of budgeting. Budgetary slack, however, is a deliberate distortion that can harm organizational performance.

Conclude that budgetary slack is the correct answer as it represents a potential negative outcome of budgeting, contrasting with the other listed outcomes which are positive.