Self-test: Behaviourable aspects of budgeting

Question 1 The balanced scorecard of Kaplan and Norton suggests that there should be four performance perspectives. However, a proper appreciation of this approach recognises that the perspectives form a hierarchy. Which of the following is the correct order (from top to bottom) of the perspectives? A - Financial, customer, internal business, innovation and learning B - Internal business, innovation and learning, financial, customer C - Innovation and learning, financial, customer, internal business D - Financial, customer, internal business, innovation and learning Question 2 In the SMART approach to setting objectives, what does 'R' stand for? A - Rigorous B - Relevant C - Right D - Rough Question 3 In the diagram, at what level should the budget be set to be a motivating budget? A - Difficulty level A B - Difficulty level B C - Difficulty level C D - Difficulty level D Question 4 What style of using budget information is being applied by a manager who primarily judges employees' performance on their ability to increase the long-term effectiveness of their departments? A - Budget-constrained style B - Profit conscious style C - Non-accounting style D - Balanced scorecard style Question 5 Budgets should be set only for aspects of performance that are easy to measure. A - True B - False

Question 6 Authorisation can be included as one of the functions of budgeting and this can help with A - The centralisation of decision making B - A bottom-up approach to decision making C - The non-accounting style of budget use D - The delegation of decision making