What is the term for the technique of making a target easier to reach by deliberately underestimating income or overestimating expenses?

Multiple choice question for Master Budget and Responsibility Accounting. Select an option, then review the explanation below.

Explanation

Budgetary slack refers to the intentional practice of setting budget targets that are easier to achieve by underestimating expected revenues or overestimating anticipated costs.

Practice related questions from the same subject.

1.Which budgeting approach integrates expected enhancements during the budgeting timeframe into the budget figures?
2.Which section of the master budget includes the capital expenditure plan, the projected cash flow statement, and the forecasted balance sheet?
3.What is the third stage in the process of preparing an operating budget?
4.Given that indirect labor costs amount to $20,000, power expenses are $5,000, and maintenance plus supplies cost $10,000, what is the total manufacturing budget?
5.What is the final phase in the process of creating an operating budget?

What is the term for the technique of making a target easier to reach by deliberately underestimating income or overestimating expenses?

Explanation

More Master Budget and Responsibility Accounting MCQs