Question 1

Continuous budgets are a common form of _____.

Accepted Answer

A) strategic plans 
B) capital budgets 
C) pro forma statements 
D) financial reports 
A) strategic plans 
B) capital budgets 
C) pro forma statements 
D) financial reports

Question 2

Budgeting may use nonfinancial terms.

Accepted Answer

A) True 
 B)False

Question 3

The first budget in the budgeting process

Accepted Answer

The answer of The first budget in the budgeting process...

Question 4

The part of the master budget that focuses on the effects that the operating budget and other plans such as capital budgets and repayments of debt) will have on cash

Accepted Answer

The answer of The part of the master budget that...

Question 5

High Company has the following information: $\begin{array}{lr}
\text { Month } & \text { Budgeted Purchases } \
\hline \text { January } & \$ 33,000  \
\text { February } &37,000\
\text { March } & 31,000  \
\text { April } & 30,000 \
\text { May } &27,680 \
\end{array}$ Purchases are paid for in the following manner: 75% in the month of purchase
25% in the month after purchase
_____ is the expected balance in Accounts Payable as of April 30.

Accepted Answer

A) $0 
B) $7,500 
C) $20,250 
D) $30,000 
A) $0 
B) $7,500 
C) $20,250 
D) $30,000

Question 6

Accurate sales forecasting is essential to effective budgeting.

Accepted Answer

A) True 
 B)False

Question 7

The Drew Company has the following information: $\begin{array}{lc}
\text { Month } & \text { Budgeted Sales } \
\text { March } & \$ 150,000 \
\text { April } & 153,000 \
\text { May } & 151,000 \
\text { June } & 254,500 \
\text { Julv } & 252,500
\end{array}$ In addition, the gross profit rate is 40% and the desired ending inventory level is 20% of next month's sales.
Required: Prepare a purchases budget for April through June.

Accepted Answer

The answer of The Drew Company has the following information:...

Question 8

The financial budget includes _____.

Accepted Answer

A) only the capital budget and the cash budget 
B) only the capital budget and the budgeted balance sheet 
C) the capital budget, the cash budget, and the budgeted balance sheet 
D) the cash budget, the budgeted statement of cash flows, and the retained earnings budget 
A) only the capital budget and the cash budget 
B) only the capital budget and the budgeted balance sheet 
C) the capital budget, the cash budget, and the budgeted balance sheet 
D) the cash budget, the budgeted statement of cash flows, and the retained earnings budget

Question 9

Statement of planned cash receipts and disbursements

Accepted Answer

The answer of Statement of planned cash receipts and disbursements...

Question 10

Depreciation expense is usually subtracted as an operating expense to calculate budgeted ending cash on hand.

Accepted Answer

A) True 
 B)False

Question 11

Hot Hotels operates a 100-room property in a location popular for "spring breakers".Occupancy rates average 97% in March and 90% in April.The average room rental is $150 per night.Expected sales for April are _____.

Accepted Answer

A) $405,000 
B) $418,500 
C) $436,500 
D) $450,000 
A) $405,000 
B) $418,500 
C) $436,500 
D) $450,000

Question 12

Financial planning models _____.

Accepted Answer

A) focus on the budgeted balance sheet 
B) allow managers to assess the predicted impacts of various alternatives before final decisions are selected 
C) attempt to answer "How come?" questions 
D) are extremely accurate, thus lessening the need for management judgment 
A) focus on the budgeted balance sheet 
B) allow managers to assess the predicted impacts of various alternatives before final decisions are selected 
C) attempt to answer "How come?" questions 
D) are extremely accurate, thus lessening the need for management judgment

Question 13

Super Hotels operates a 100-room property in a location popular for "spring breakers".Occupancy rates average 95% in March and 80% in April.The average room rental is $150 per night.Expected sales for March are _____.

Accepted Answer

A) $372,000 
B) $418,500 
C) $427,500 
D) $441,750 
A) $372,000 
B) $418,500 
C) $427,500 
D) $441,750

Question 14

Pro forma statements are most closely associated with the _____.

Accepted Answer

A) master budget 
B) operating budget 
C) financial budget 
D) strategic plan 
A) master budget 
B) operating budget 
C) financial budget 
D) strategic plan

Question 15

This budget is the last budget that is constructed

Accepted Answer

Budgeted b

Question 16

Taurus Company has the following data: $\begin{array}{lr}
\text { Month } & \text { Budgeted Sales } \
\hline \text { January } & \$ 108,000 \
\text { February } & 132,000 \
\text { March } & 144,000 \
\text { April } & 120,000
\end{array}$ The gross profit rate is 40% and the inventory at the end of December was $19,000.Desired inventory levels are 30% of next month's sales at cost._____ is the expected total purchases budgeted for February.

Accepted Answer

A) $105,120 
B) $79,200 
C) $81,360 
D) None of these answers is correct 
A) $105,120 
B) $79,200 
C) $81,360 
D) None of these answers is correct

Question 17

Explain the benefits of a good budgeting plan.

Accepted Answer

Budgets compel managers to think ahead,

Question 18

"Cooking the books" refers to reporting false accounting numbers.

Accepted Answer

A) True 
 B)False

Question 19

Continuous budgets are constructed by adding a _____.

Accepted Answer

A) new goal as a current goal is achieved 
B) new cost object as a current cost object is eliminated 
C) month in the future as the month just ended is dropped 
D) year in the future as the current year just ended is dropped 
A) new goal as a current goal is achieved 
B) new cost object as a current cost object is eliminated 
C) month in the future as the month just ended is dropped 
D) year in the future as the current year just ended is dropped

Question 20

_____ is an important factor considered by sales forecasters.

Accepted Answer

A) Past patterns of sales 
B) Estimates made by the sales force 
C) General economic conditions 
D) All of these answers are correct 
A) Past patterns of sales 
B) Estimates made by the sales force 
C) General economic conditions 
D) All of these answers are correct

Continuous budgets are a common form of _____.

Budgeting may use nonfinancial terms.

The first budget in the budgeting process

The part of the master budget that focuses on the effects that the operating budget and other plans such as capital budgets and repayments of debt) will have on cash

Accurate sales forecasting is essential to effective budgeting.

The financial budget includes _____.

Statement of planned cash receipts and disbursements

Depreciation expense is usually subtracted as an operating expense to calculate budgeted ending cash on hand.

Hot Hotels operates a 100-room property in a location popular for "spring breakers".Occupancy rates average 97% in March and 90% in April.The average room rental is $150 per night.Expected sales for April are _____.

Financial planning models _____.

Super Hotels operates a 100-room property in a location popular for "spring breakers".Occupancy rates average 95% in March and 80% in April.The average room rental is $150 per night.Expected sales for March are _____.

Pro forma statements are most closely associated with the _____.

This budget is the last budget that is constructed

Explain the benefits of a good budgeting plan.

"Cooking the books" refers to reporting false accounting numbers.

Continuous budgets are constructed by adding a _____.

_____ is an important factor considered by sales forecasters.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 7: Introduction to Budgets and Preparing the Master Budget

Continuous budgets are a common form of _____.

Budgeting may use nonfinancial terms.

The first budget in the budgeting process

The part of the master budget that focuses on the effects that the operating budget and other plans such as capital budgets and repayments of debt) will have on cash

Accurate sales forecasting is essential to effective budgeting.

The financial budget includes _____.

Statement of planned cash receipts and disbursements

Depreciation expense is usually subtracted as an operating expense to calculate budgeted ending cash on hand.

Hot Hotels operates a 100-room property in a location popular for "spring breakers".Occupancy rates average 97% in March and 90% in April.The average room rental is $150 per night.Expected sales for April are _____.

Financial planning models _____.

Super Hotels operates a 100-room property in a location popular for "spring breakers".Occupancy rates average 95% in March and 80% in April.The average room rental is $150 per night.Expected sales for March are _____.

Pro forma statements are most closely associated with the _____.

This budget is the last budget that is constructed

Explain the benefits of a good budgeting plan.

"Cooking the books" refers to reporting false accounting numbers.

Continuous budgets are constructed by adding a _____.

_____ is an important factor considered by sales forecasters.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters