Question 1

A budget period should be

Accepted Answer

A) monthly. 
B) for a year or more. 
C) long-term. 
D) long enough to provide an obtainable goal under normal business conditions. 
A) monthly. 
B) for a year or more. 
C) long-term. 
D) long enough to provide an obtainable goal under normal business conditions.

Question 2

If budgets are to be effective, all of the following must be present except

Accepted Answer

A) acceptance at all levels of management. 
B) research and analysis in setting realistic goals. 
C) stockholders' approval of the budget. 
D) sound organizational structure. 
A) acceptance at all levels of management. 
B) research and analysis in setting realistic goals. 
C) stockholders' approval of the budget. 
D) sound organizational structure.

Question 3

A budget can facilitate the coordination of activities among the segments of a large company.

Accepted Answer

A) True 
 B)False

Question 4

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Accepted Answer

A) True 
 B)False

Question 5

Coordinating the preparation of the budget is the responsibility of the

Accepted Answer

A) treasurer. 
B) president. 
C) chief accountant. 
D) budget committee. 
A) treasurer. 
B) president. 
C) chief accountant. 
D) budget committee.

Question 6

A critical factor in budgeting for a service firm is to determine the amount of products to purchase.

Accepted Answer

A) True 
 B)False

Question 7

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

Accepted Answer

A) True 
 B)False

Question 8

A sales forecast

Accepted Answer

A) shows a forecast for the firm only. 
B) shows a forecast for the industry only. 
C) shows forecasts for the industry and for the firm. 
D) plays a minor role in the development of the master budget. 
A) shows a forecast for the firm only. 
B) shows a forecast for the industry only. 
C) shows forecasts for the industry and for the firm. 
D) plays a minor role in the development of the master budget.

Question 9

The culmination of preparing operating budgets is the

Accepted Answer

A) budgeted balance sheet. 
B) production budget. 
C) cash budget. 
D) budgeted income statement. 
A) budgeted balance sheet. 
B) production budget. 
C) cash budget. 
D) budgeted income statement.

Question 10

During September, the capital expenditure budget indicates a $420,000 purchase of equipment.The ending September cash balance from operations is budgeted to be $60,000.The company wants to maintain a minimum cash balance of $30,000.What is the minimum cash loan that must be planned to be borrowed from the bank during September?

Accepted Answer

A) $330,000 
B) $360,000 
C) $450,000 
D) $390,000 
A) $330,000 
B) $360,000 
C) $450,000 
D) $390,000

Question 11

Hyde Corp.'s cash budget showed total available cash less cash disbursements.What does this amount equal?

Accepted Answer

A) Ending cash balance 
B) Total cash receipts 
C) The excess of available cash over cash disbursements 
D) The amount of financing required 
A) Ending cash balance 
B) Total cash receipts 
C) The excess of available cash over cash disbursements 
D) The amount of financing required

Question 12

If a company has adopted continuous budgeting, the budget will show plans for

Accepted Answer

A) every day. 
B) a full year ahead. 
C) the current year and the next year. 
D) at least five years. 
A) every day. 
B) a full year ahead. 
C) the current year and the next year. 
D) at least five years.

Question 13

The following information is taken from the production budget for the first quarter: $$\begin{array} { l r } 
\text { Beginning inventory in units } & 1,200 \
\text { Sales budgeted for the quarter } & 426,000 \
\text { Capacity in units of production facility } & 472,000
\end{array}$$ How many finished goods units should be produced during the quarter if the company desires 3,200 units available to start the next quarter?

Accepted Answer

A) 428,000 
B) 424,000 
C) 474,000 
D) 429,200 
A) 428,000 
B) 424,000 
C) 474,000 
D) 429,200

Question 14

The following credit sales are budgeted by Terra Co.: $$\begin{array} { l r } 
\text { January } & \$ 204,000 \
\text { February } & 300,000 \
\text { March } & 420,000 \
\text { April } & 360,000
\end{array}$$ The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale.The anticipated cash inflow for the month of April is

Accepted Answer

A) $370,320. 
B) $336,000. 
C) $360,000. 
D) $352,800. 
A) $370,320. 
B) $336,000. 
C) $360,000. 
D) $352,800.

Question 15

The direct materials budget details
1.	the quantity of direct materials to be purchased.
2.	the cost of direct materials to be purchased.

Accepted Answer

A) 1 
B) 2 
C) both 1 and 2 
D) neither 1 nor 2 
A) 1 
B) 2 
C) both 1 and 2 
D) neither 1 nor 2

Question 16

Haft Construction Company determines that 54,000 pounds of direct materials are needed for production in July.There are 3,200 pounds of direct materials on hand at July 1 and the desired ending inventory is 2,800 pounds.If the cost per unit of direct materials is $3, what is the budgeted total cost of direct materials purchases?

Accepted Answer

A) 158,400. 
B) 160,800. 
C) 163,200. 
D) 165,600. 
A) 158,400. 
B) 160,800. 
C) 163,200. 
D) 165,600.

Question 17

A merchandiser has a merchandise purchases budget rather than a production budget.

Accepted Answer

A) True 
 B)False

Question 18

The formula for determining budgeted merchandise purchases is budgeted

Accepted Answer

A) production + desired ending inventory - beginning inventory. 
B) sales + beginning inventory - desired ending inventory. 
C) cost of goods sold + desired ending inventory - beginning inventory. 
D) cost of goods sold + beginning inventory - desired ending inventory. 
A) production + desired ending inventory - beginning inventory. 
B) sales + beginning inventory - desired ending inventory. 
C) cost of goods sold + desired ending inventory - beginning inventory. 
D) cost of goods sold + beginning inventory - desired ending inventory.

Question 19

Dolce Co.estimates its sales at 180,000 units in the first quarter and that sales will increase by 18,000 units each quarter over the year.They have, and desire, a 25% ending inventory of finished goods.Each unit sells for $25.40% of the sales are for cash.70% of the credit customers pay within the quarter.The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at

Accepted Answer

A) $3,051,000. 
B) $4,428,000. 
C) $5,319,000. 
D) $6,156,000. 
A) $3,051,000. 
B) $4,428,000. 
C) $5,319,000. 
D) $6,156,000.

Question 20

Bean Manufacturing reported the following information for 2016: $$\text { Budgeted purchases } \quad \frac { \text { October } } { \$ 240,000 } \quad \frac { \text { November } } { \$ 256,000 } \quad \frac { \text { December } } { \$ 288,000 }$$ Operating expenses are: Salaries, $100,000; Depreciation, $40,000; Rent, $20,000; Utilities, $28,000 
•Operating expenses are paid during the month incurred.
•Accounts payable is used only for inventory acquisitions.
How much is the budgeted amount of cash to be paid for operating expenses in November?

Accepted Answer

A) $404,000 
B) $148,000 
C) $188,000 
D) $444,000 
A) $404,000 
B) $148,000 
C) $188,000 
D) $444,000

A budget period should be

If budgets are to be effective, all of the following must be present except

A budget can facilitate the coordination of activities among the segments of a large company.

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Coordinating the preparation of the budget is the responsibility of the

A critical factor in budgeting for a service firm is to determine the amount of products to purchase.

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

A sales forecast

The culmination of preparing operating budgets is the

Hyde Corp.'s cash budget showed total available cash less cash disbursements.What does this amount equal?

If a company has adopted continuous budgeting, the budget will show plans for

The direct materials budget details 1. the quantity of direct materials to be purchased. 2. the cost of direct materials to be purchased.

A merchandiser has a merchandise purchases budget rather than a production budget.

The formula for determining budgeted merchandise purchases is budgeted

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

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Exam 9: Reporting and Analyzing Long-Lived Assets

A budget period should be

If budgets are to be effective, all of the following must be present except

A budget can facilitate the coordination of activities among the segments of a large company.

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Coordinating the preparation of the budget is the responsibility of the

A critical factor in budgeting for a service firm is to determine the amount of products to purchase.

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

A sales forecast

The culmination of preparing operating budgets is the

Hyde Corp.'s cash budget showed total available cash less cash disbursements.What does this amount equal?

If a company has adopted continuous budgeting, the budget will show plans for

The direct materials budget details 1. the quantity of direct materials to be purchased. 2. the cost of direct materials to be purchased.

A merchandiser has a merchandise purchases budget rather than a production budget.

The formula for determining budgeted merchandise purchases is budgeted

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Time Value of Money

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