Question 1

If budgets are to be effective, there must be

Accepted Answer

A) a history of successful operations. 
B) independent verification of budget goals. 
C) an organizational structure with clearly defined lines of authority and responsibility. 
D) excess plant capacity. 
A) a history of successful operations. 
B) independent verification of budget goals. 
C) an organizational structure with clearly defined lines of authority and responsibility. 
D) excess plant capacity.

Question 2

A benefit of budgeting is that it provides definite objectives for evaluating performance.

Accepted Answer

A) True 
 B)False

Question 3

Budgets are statements of management's plans stated in financial terms.

Accepted Answer

A) True 
 B)False

Question 4

Budgeting and long-range planning are two terms that describe the same process.

Accepted Answer

A) True 
 B)False

Question 5

Long-range planning usually encompasses a period of at least

Accepted Answer

A) six months. 
B) 1 year. 
C) 5 years. 
D) 10 years. 
A) six months. 
B) 1 year. 
C) 5 years. 
D) 10 years.

Question 6

Of the following items, which one is not obtained from an individual operating budget?

Accepted Answer

A) Selling and administrative expenses 
B) Accounts receivable 
C) Cost of goods sold 
D) Sales 
A) Selling and administrative expenses 
B) Accounts receivable 
C) Cost of goods sold 
D) Sales

Question 7

An unrealistic budget is more likely to result when it

Accepted Answer

A) has been developed in a top down fashion. 
B) has been developed in a bottom up fashion. 
C) has been developed by all levels of management. 
D) is developed with performance appraisal usages in mind. 
A) has been developed in a top down fashion. 
B) has been developed in a bottom up fashion. 
C) has been developed by all levels of management. 
D) is developed with performance appraisal usages in mind.

Question 8

Which of the following does not appear as a separate section on the cash budget?

Accepted Answer

A) Cash receipts 
B) Cash disbursements 
C) Capital expenditures 
D) Financing 
A) Cash receipts 
B) Cash disbursements 
C) Capital expenditures 
D) Financing

Question 9

The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs.

Accepted Answer

A) True 
 B)False

Question 10

If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?

Accepted Answer

A) 350,000 pounds 
B) 530,000 pounds 
C) 290,000 pounds 
D) 470,000 pounds 
A) 350,000 pounds 
B) 530,000 pounds 
C) 290,000 pounds 
D) 470,000 pounds

Question 11

The direct materials and direct labor budgets provide information for preparing the

Accepted Answer

A) sales budget. 
B) production budget. 
C) manufacturing overhead budget. 
D) cash budget. 
A) sales budget. 
B) production budget. 
C) manufacturing overhead budget. 
D) cash budget.

Question 12

Young Co. has budgeted its activity for December according to the following information:
1.	Sales at $600,000, all for cash.
2.	Budgeted depreciation for December is $15,000.
4.	The cash balance at December 1 was $15,000.
5.	Selling and administrative expenses are budgeted at $60,000 for December and are paid for in cash.
6.	The planned merchandise inventory on December 31 and December 1 is $18,000.
7.	The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid in cash.
How much are the budgeted cash disbursements for December?

Accepted Answer

A) 	$345,000 
B)  	$510,000 
C)  	$525,000 
D) 	$492,000 
A) 	$345,000 
B)  	$510,000 
C)  	$525,000 
D) 	$492,000

Question 13

Which of the following statements about budget acceptance in an organization is true?

Accepted Answer

A) The most widely accepted budget by the organization is the one prepared by top management. 
B) The most widely accepted budget by the organization is the one prepared by the department heads. 
C) Budgets are hardly ever accepted by anyone except top management. 
D) Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process. 
A) The most widely accepted budget by the organization is the one prepared by top management. 
B) The most widely accepted budget by the organization is the one prepared by the department heads. 
C) Budgets are hardly ever accepted by anyone except top management. 
D) Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process.

Question 14

The production budget shows expected unit sales are 100,000.The required production units are 104,000.What are the beginning and desired ending finished goods units, respectively? $$\begin{array} { l c c } 
& \text { Beginning Units } & \text { Ending Units } \
\text { a. } & 10,000 & 6,000 \
\text { b. } & 6,000 & 10,000 \
\text { c. } & 4,000 & 10,000 \
\text { d. } & 10,000 & 4,000
\end{array}$$

Accepted Answer

The answer of The production budget shows expected unit sales...

Question 15

In the direct materials budget, the quantity of direct materials to be purchased is computed by adding direct materials required for production to

Accepted Answer

A) desired ending direct materials. 
B) beginning direct materials. 
C) desired ending direct materials less beginning direct materials. 
D) beginning direct materials less desired ending direct materials. 
A) desired ending direct materials. 
B) beginning direct materials. 
C) desired ending direct materials less beginning direct materials. 
D) beginning direct materials less desired ending direct materials.

Question 16

Petal Co.reported the following information for 2016: $\begin{array}{lr}
&\text { October }&\text { November }&\text { December }\
\text { Budgeted sales }&\$930,000&\$870,000&\$1,080,000
\end{array}$ •All sales are on credit. 
•Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
How much is the November 30, 2016 budgeted Accounts Receivable?

Accepted Answer

A) $900,000 
B) $540,000 
C) $465,000 
D) $435,000 
A) $900,000 
B) $540,000 
C) $465,000 
D) $435,000

Question 17

A common starting point in the budgeting process is

Accepted Answer

A) expected future net income. 
B) past performance. 
C) to motivate the sales force. 
D) a clean slate, with no expectations. 
A) expected future net income. 
B) past performance. 
C) to motivate the sales force. 
D) a clean slate, with no expectations.

Question 18

Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250,000, February $300,000 and March $350,000.Cash payments are 60% in the month of purchase and 40% in the following month.The budgeted cash payments for March are

Accepted Answer

A) $330,000. 
B) $320,000. 
C) $300,000. 
D) $260,000. 
A) $330,000. 
B) $320,000. 
C) $300,000. 
D) $260,000.

Question 19

The cash budget reflects

Accepted Answer

A) all revenues and all expenses for a period. 
B) expected cash receipts and cash disbursements from all sources. 
C) all the items that appear on a budgeted income statement. 
D) all the items that appear on a budgeted balance sheet. 
A) all revenues and all expenses for a period. 
B) expected cash receipts and cash disbursements from all sources. 
C) all the items that appear on a budgeted income statement. 
D) all the items that appear on a budgeted balance sheet.

Question 20

The budgeted income statement indicates the expected profitability of operations for the next year.

Accepted Answer

A) True 
 B)False

If budgets are to be effective, there must be

A benefit of budgeting is that it provides definite objectives for evaluating performance.

Budgets are statements of management's plans stated in financial terms.

Budgeting and long-range planning are two terms that describe the same process.

Long-range planning usually encompasses a period of at least

Of the following items, which one is not obtained from an individual operating budget?

An unrealistic budget is more likely to result when it

Which of the following does not appear as a separate section on the cash budget?

The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs.

If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?

The direct materials and direct labor budgets provide information for preparing the

Which of the following statements about budget acceptance in an organization is true?

The production budget shows expected unit sales are 100,000.The required production units are 104,000.What are the beginning and desired ending finished goods units, respectively? Beginning Units Ending Units a. 10,000 6,000 b. 6,000 10,000 c. 4,000 10,000 d. 10,000 4,000

In the direct materials budget, the quantity of direct materials to be purchased is computed by adding direct materials required for production to

A common starting point in the budgeting process is

Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250,000, February $300,000 and March $350,000.Cash payments are 60% in the month of purchase and 40% in the following month.The budgeted cash payments for March are

The cash budget reflects

The budgeted income statement indicates the expected profitability of operations for the next year.

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

If budgets are to be effective, there must be

A benefit of budgeting is that it provides definite objectives for evaluating performance.

Budgets are statements of management's plans stated in financial terms.

Budgeting and long-range planning are two terms that describe the same process.

Long-range planning usually encompasses a period of at least

Of the following items, which one is not obtained from an individual operating budget?

An unrealistic budget is more likely to result when it

Which of the following does not appear as a separate section on the cash budget?

The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs.

If there were 60,000 pounds of raw materials on hand on January 1, 120,000 pounds are desired for inventory at January 31, and 410,000 pounds are required for January production, how many pounds of raw materials should be purchased in January?

The direct materials and direct labor budgets provide information for preparing the

Which of the following statements about budget acceptance in an organization is true?

The production budget shows expected unit sales are 100,000.The required production units are 104,000.What are the beginning and desired ending finished goods units, respectively? Beginning Units Ending Units a. 10,000 6,000 b. 6,000 10,000 c. 4,000 10,000 d. 10,000 4,000

In the direct materials budget, the quantity of direct materials to be purchased is computed by adding direct materials required for production to

A common starting point in the budgeting process is

Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250,000, February $300,000 and March $350,000.Cash payments are 60% in the month of purchase and 40% in the following month.The budgeted cash payments for March are

The cash budget reflects

The budgeted income statement indicates the expected profitability of operations for the next year.

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

Filters