Question

1.

Major financial reports include the balance sheet (BS) and the income statement (IS). Which of the following depicts the nature of these statements as to whether it relates to a point in time, or a period of time (such as a quarter or year?

   Point in time      Period of time

a BS IS

b IS BS

c BS,IS neither

d neither BS,IS

Group of answer choices

a. d

b. b

c. a

d. c

2. Benefits of operating budgets do not include:

a. defines the mission of the company

b. force managers to think and plan ahead

c. aid in the implementation of the organizations’ plans

d. allow for evaluation of departments and managers

Answer 1

Question no. 1

Answer (c). a

BS- point of time. IS - period of time

Explanation

Balance sheet is prepared on a particular point of time.

It shows the position of Assets liabilities and capital capital of the company which are going changing for every time .

That is they are not remain same for a period.

Therefore for knowing tha state of position of company the balance sheet is prepared at particular time.

INCOME STATEMENT:-----_ On the other hand the income statement is prepared for a particular period of time for the purpose of measuring the profitability of the organisation for that particular period. The Revenues and expenditure are included in the income statement which are included during such period.

Question no 2.

Anwser (a) defines the mission of the company.

Amongst all other options given it is not a advantage of opreting budget.

Because operating budget are prepared for proper execution of the planned operations or activities of the organisation.

Generally is prepared periodically and revised as per the current requirements.

So we cant can that operating budget defines the mission of the company.

Explanation for other points which are the benefits of operating budgets

• Force managers to think and plan ahead :--- A benefit of the operating budget is to keep the track of whole business which forces managers to act accordingly and prapare the operating budget.
• Aid in implementation of organisations' plan. :-- by the help of operating budget the management can achieve the planned targets of the organisation
• Allow for evaluation of departments and managers:-- by the help of operating budget the owner of the organisation can check performance of departments and managers by noting that is there is any variation or deviation from the operating budget in a particular department or by managers.