KU ACCT 201 EXAM 3 Questions And Correct Answers 2025.

What is a budget? - Answer an operating plan that is expressed primarily in financial terms What is top down budgeting? - Answer starts with the executive management team and a strategic plan and tell operational managers what the budget is What is bottom-up budgeting? - Answer Budget preparation that begins with the lowest level of management and is adjusted at each level to align with the strategic plan What is top down budgeting also known as? - Answer imposed budgeting What is bottom up budgeting also known as? - Answer participative budgeting What are the pros to participative budgeting? - Answer - lower level management has more detail = more accuracy - lower level management is motivated to meet budgets that they helped create What are the cons to participative budgeting? - Answer - too complex and time-consuming - more people must provide input - padding the budget (people may intentionally inflate the budget estimates or include unnecessary expenses to create a financial buffer to secure additional resources) What is incremental budgeting? - Answer budget preparation begins with the budget from last year - makes adjustments based on anticipated changes in operations What is zero based budgeting? - Answer budget begins with $0 - every expense is justified or it is not included