Question 1

The most common budget period is

Accepted Answer

A) one month. 
B) three months. 
C) six months. 
D) one year. 
A) one month. 
B) three months. 
C) six months. 
D) one year.

Question 2

Which of the following is done to improve the reliability of the sales forecast?

Accepted Answer

A) Employ financial planning models 
B) Lengthen the planning horizon to more than a year 
C) Rely solely on outside consultants 
D) Use the sales forecasts from the previous year 
A) Employ financial planning models 
B) Lengthen the planning horizon to more than a year 
C) Rely solely on outside consultants 
D) Use the sales forecasts from the previous year

Question 3

A budget can be used as a basis for evaluating performance.

Accepted Answer

A) True 
 B)False

Question 4

A budget

Accepted Answer

A) is a substitute for management. 
B) is an aid to management. 
C) can operate or enforce itself. 
D) is the responsibility of the accounting department. 
A) is a substitute for management. 
B) is an aid to management. 
C) can operate or enforce itself. 
D) is the responsibility of the accounting department.

Question 5

Which of the following expenses would not appear on a selling and administrative expense budget?

Accepted Answer

A) Sales commissions 
B) Depreciation 
C) Property taxes 
D) Indirect labor 
A) Sales commissions 
B) Depreciation 
C) Property taxes 
D) Indirect labor

Question 6

The longer the budget period, the more reliable the estimates of future outcomes.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following items does not follow from the adoption of a budget?

Accepted Answer

A) Promote efficiency 
B) Deterrent to waste 
C) Basis for performance evaluation 
D) Guarantee of accomplishing the profit objective 
A) Promote efficiency 
B) Deterrent to waste 
C) Basis for performance evaluation 
D) Guarantee of accomplishing the profit objective

Question 8

Pell Manufacturing is preparing its direct labor budget for May.Projections for the month are that 33,400 units are to be produced and that direct labor time is three hours per unit.If the labor cost per hour is $12, what is the total budgeted direct labor cost for May?

Accepted Answer

A) 1,159,200. 
B) 1,180,800. 
C) 1,202,400. 
D) 1,296,000. 
A) 1,159,200. 
B) 1,180,800. 
C) 1,202,400. 
D) 1,296,000.

Question 9

A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.During August, the following items were budgeted: $\begin{array}{lr}
\text { Wages Expense } & \$ 150,000 \
\text { Purchase of office equipment } & 72,000 \
\text { Selling and Administrative Expenses } & 48,000 \
\text { Depreciation Expense } & 36,000
\end{array}$ The budgeted cash disbursements for August are

Accepted Answer

A) $648,000. 
B) $426,000. 
C) $696,000. 
D) $732,000. 
A) $648,000. 
B) $426,000. 
C) $696,000. 
D) $732,000.

Question 10

Why are budgets useful in the planning process?

Accepted Answer

A) They provide management with information about the company's past performance. 
B) They help communicate goals and provide a basis for evaluation. 
C) They guarantee the company will be profitable if it meets its objectives. 
D) They enable the budget committee to earn their paycheck. 
A) They provide management with information about the company's past performance. 
B) They help communicate goals and provide a basis for evaluation. 
C) They guarantee the company will be profitable if it meets its objectives. 
D) They enable the budget committee to earn their paycheck.

Question 11

The projection of financial position at the end of the budget period is found on the

Accepted Answer

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

Question 12

For better management acceptance, the flow of input data for budgeting should begin with the

Accepted Answer

A) accounting department. 
B) top management. 
C) lower levels of management. 
D) budget committee. 
A) accounting department. 
B) top management. 
C) lower levels of management. 
D) budget committee.

Question 13

Budgeting in not-for-profit organizations

Accepted Answer

A) is not important because they are not profit-oriented. 
B) usually starts with budgeting expenditures, rather than receipts. 
C) is necessary only if some product is produced and sold. 
D) consists entirely of budgeted contributions. 
A) is not important because they are not profit-oriented. 
B) usually starts with budgeting expenditures, rather than receipts. 
C) is necessary only if some product is produced and sold. 
D) consists entirely of budgeted contributions.

Question 14

Effective budgeting requires clearly defined lines of authority and responsibility.

Accepted Answer

A) True 
 B)False

Question 15

The budgeted balance sheet is prepared entirely from the budgets for the current year.

Accepted Answer

A) True 
 B)False

Question 16

A budget is most likely to be effective if

Accepted Answer

A) it is used to assess blame when things do not occur according to plans. 
B) it is not used to evaluate a manager's performance. 
C) employees and managers at the lower levels do not get involved in the budgeting process. 
D) it has top management support. 
A) it is used to assess blame when things do not occur according to plans. 
B) it is not used to evaluate a manager's performance. 
C) employees and managers at the lower levels do not get involved in the budgeting process. 
D) it has top management support.

Question 17

The direct materials budget shows: $\begin{array}{ll}
\text { Desired ending direct materials } & 48,000 \text { pounds } \
\text { Total materials required } & 69,000 \text { pounds } \
\text { Direct materials purchases } & 63,200 \text { pounds }
\end{array}$ The total direct materials needed for production is

Accepted Answer

A) 21,000 pounds. 
B) 5,800 pounds. 
C) 15,200 pounds. 
D) 132,200 pounds. 
A) 21,000 pounds. 
B) 5,800 pounds. 
C) 15,200 pounds. 
D) 132,200 pounds.

Question 18

Which one of the following is a problem resulting from a service company being overstaffed?

Accepted Answer

A) Labor costs will be disproportionately low. 
B) Profits will be higher because of the additional salaries. 
C) Staff turnover may increase. 
D) Revenue may be lost. 
A) Labor costs will be disproportionately low. 
B) Profits will be higher because of the additional salaries. 
C) Staff turnover may increase. 
D) Revenue may be lost.

Question 19

The primary benefits of budgeting include all of the following except it

Accepted Answer

A) requires only top management to plan ahead and formalize their future goals. 
B) provides definite objectives for evaluating performance. 
C) creates an early warning system for potential problems. 
D) motivates personnel throughout the organization. 
A) requires only top management to plan ahead and formalize their future goals. 
B) provides definite objectives for evaluating performance. 
C) creates an early warning system for potential problems. 
D) motivates personnel throughout the organization.

Question 20

Which of the following is not a proper match-up?

Accepted Answer

A) Long range planning ↔ Strategies 
B) Budgeting ↔ Short-term goals 
C) Long-range planning ↔ 5 years 
D) Budgeting ↔ Long-term goals 
A) Long range planning ↔ Strategies 
B) Budgeting ↔ Short-term goals 
C) Long-range planning ↔ 5 years 
D) Budgeting ↔ Long-term goals

The most common budget period is

Which of the following is done to improve the reliability of the sales forecast?

A budget can be used as a basis for evaluating performance.

A budget

Which of the following expenses would not appear on a selling and administrative expense budget?

The longer the budget period, the more reliable the estimates of future outcomes.

Which of the following items does not follow from the adoption of a budget?

Pell Manufacturing is preparing its direct labor budget for May.Projections for the month are that 33,400 units are to be produced and that direct labor time is three hours per unit.If the labor cost per hour is $12, what is the total budgeted direct labor cost for May?

Why are budgets useful in the planning process?

The projection of financial position at the end of the budget period is found on the

For better management acceptance, the flow of input data for budgeting should begin with the

Budgeting in not-for-profit organizations

Effective budgeting requires clearly defined lines of authority and responsibility.

The budgeted balance sheet is prepared entirely from the budgets for the current year.

A budget is most likely to be effective if

The direct materials budget shows: Desired ending direct materials 48,000 pounds Total materials required 69,000 pounds Direct materials purchases 63,200 pounds The total direct materials needed for production is

Which one of the following is a problem resulting from a service company being overstaffed?

The primary benefits of budgeting include all of the following except it

Which of the following is not a proper match-up?

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

The most common budget period is

Which of the following is done to improve the reliability of the sales forecast?

A budget can be used as a basis for evaluating performance.

A budget

Which of the following expenses would not appear on a selling and administrative expense budget?

The longer the budget period, the more reliable the estimates of future outcomes.

Which of the following items does not follow from the adoption of a budget?

Pell Manufacturing is preparing its direct labor budget for May.Projections for the month are that 33,400 units are to be produced and that direct labor time is three hours per unit.If the labor cost per hour is $12, what is the total budgeted direct labor cost for May?

Why are budgets useful in the planning process?

The projection of financial position at the end of the budget period is found on the

For better management acceptance, the flow of input data for budgeting should begin with the

Budgeting in not-for-profit organizations

Effective budgeting requires clearly defined lines of authority and responsibility.

The budgeted balance sheet is prepared entirely from the budgets for the current year.

A budget is most likely to be effective if

The direct materials budget shows: Desired ending direct materials 48,000 pounds Total materials required 69,000 pounds Direct materials purchases 63,200 pounds The total direct materials needed for production is

Which one of the following is a problem resulting from a service company being overstaffed?

The primary benefits of budgeting include all of the following except it

Which of the following is not a proper match-up?

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