What are three benefits to the use of contingency funds?
What will be an ideal response?
Use of contingency funds is at first glance not a cause for celebration; however the author identifies three benefits derived from the use of these funds. The first benefit is that their use recognizes that the future contains unknowns and the problems that arise are likely to have a direct effect on the project budget. The project has a cushion of contingency to combat the time and money variance. The second benefit is that the company has already made provision for extra expense and as these funds are used, it opens management's eyes to the possibility of a significant budget increase on the horizon. Finally, application to the contingency funds gives an early warning signal of potential overdrawn budget so management can take a close look at the project and begin formulating additional plans in case the negative trend continues.
You might also like to view...
Accounting controls primarily concern safeguarding of assets and ensuring the reliability of the financial statements
a. True b. False Indicate whether the statement is true or false
The regression equation y = a+ bX assumes that the function is curvilinear in nature
Indicate whether the statement is true or false
Which one of the following is NOT true of peers as a source of performance information?
A. Peers may know the job requirements better than a supervisor in some cases. B. Peers can evaluate the ability of others to interact within the group or team better than supervisors in many cases. C. Research regarding validity of peer evaluations is overwhelmingly clear on their lack of bias. D. Peer ratings are particularly useful when supervisors do not have the opportunity to observe employees. E. All of the above are true.
Three ways to achieve coherence are to use
A) unity, passive voice, and active voice. B) short paragraphs, a confident tone, and topic sentences. C) transitional words, pronouns, and repetition. D) white space, headings, and justification. E) transitions for cause and effect, sequence, and contrast.