Multiple Choice
Which of the following is NOT a measure of liquidity?
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1. Introduction to Accounting
Types of Accounting
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Which of the following is a step in the budgetary control process?
A
Ignoring variances between actual and budgeted results
B
Eliminating all non-financial performance measures
C
Recording only cash transactions
D
Establishing budgeted amounts for each department
Verified step by step guidance1
Understand the concept of budgetary control: Budgetary control is a process used by organizations to monitor and control their financial performance by comparing actual results with budgeted amounts.
Identify the key steps in the budgetary control process: These typically include setting budgeted amounts, comparing actual results to the budget, analyzing variances, and taking corrective actions.
Evaluate the options provided in the problem: Review each option to determine whether it aligns with the budgetary control process. For example, ignoring variances or eliminating non-financial measures are not part of effective budgetary control.
Focus on the correct step: Establishing budgeted amounts for each department is a fundamental step in the budgetary control process, as it sets the baseline for comparison and performance evaluation.
Conclude that the correct answer is the step that aligns with the principles of budgetary control, which is 'Establishing budgeted amounts for each department.'
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