Question 1

Which is true of budgets?

Accepted Answer

A) They are voted on and approved by stockholders. 
B) They are used in the planning, but not in the control, process. 
C) There is a standard form and structure for budgets. 
D) They are used in performance evaluation. 
A) They are voted on and approved by stockholders. 
B) They are used in the planning, but not in the control, process. 
C) There is a standard form and structure for budgets. 
D) They are used in performance evaluation.

Question 2

Budgeting is usually most closely associated with which management function?

Accepted Answer

A) Planning 
B) Directing 
C) Motivating 
D) Controlling 
A) Planning 
B) Directing 
C) Motivating 
D) Controlling

Question 3

An overly optimistic sales budget may result in

Accepted Answer

A) increases in selling prices late in the year. 
B) insufficient inventories. 
C) increased sales during the year. 
D) excessive inventories. 
A) increases in selling prices late in the year. 
B) insufficient inventories. 
C) increased sales during the year. 
D) excessive inventories.

Question 4

In order to develop a budgeted balance sheet, the previous year's balance sheet is needed.

Accepted Answer

A) True 
 B)False

Question 5

Dex Industries expects to purchase $120,000 of materials in March and $140,000 of materials in April.Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase.In addition, a 2% discount is received for payments made in the month of purchase.How much will April's cash disbursements for materials purchases be?

Accepted Answer

A) $88,200 
B) $108,200 
C) $132,900 
D) $120,000 
A) $88,200 
B) $108,200 
C) $132,900 
D) $120,000

Question 6

The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not an operating budget?

Accepted Answer

A) Direct labor budget 
B) Sales budget 
C) Production budget 
D) Cash budget 
A) Direct labor budget 
B) Sales budget 
C) Production budget 
D) Cash budget

Question 8

Which of the following statements about a budgeted income statement is not true?

Accepted Answer

A) The budgeted income statement is prepared after the financial budgets are prepared. 
B) The budgeted income statement is prepared on the accrual basis of accounting. 
C) The budgeted income statement can be prepared in a multiple-step format. 
D) The budgeted income statement is prepared using the individual operating budgets. 
A) The budgeted income statement is prepared after the financial budgets are prepared. 
B) The budgeted income statement is prepared on the accrual basis of accounting. 
C) The budgeted income statement can be prepared in a multiple-step format. 
D) The budgeted income statement is prepared using the individual operating budgets.

Question 9

Dart, Inc.makes and sells umbrellas.The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year.The following budget data are available: $\begin{array}{lll}\text { Item }&\text { Variable Cost Per Unit Sold }&\text { Monthly Fixed Cost }\
\text { Sales commissions } & \$ 0.60 & \$ 6,000 \
\text { Shipping } & 1.20 & \
\text { Advertising } & 0.30 &\
\text { Executive salaries } &&40,000 \
\text { Depreciation on office equipment } && 8,000 \
\text { Other } & 0.35 & 28,000
\end{array}$ Expenses are paid in the month incurred.If the company has budgeted to sell 8,000 umbrellas in October, how much is the total budgeted variable selling and administrative expenses for October?

Accepted Answer

A) $16,800 
B) $18,400 
C) $101,600 
D) $19,600 
A) $16,800 
B) $18,400 
C) $101,600 
D) $19,600

Question 10

The production budget shows that expected unit sales are 48,000.The total required units are 54,000.What are the required production units?

Accepted Answer

A) 6,000 
B) 9,000 
C) 12,000 
D) Cannot be determined from the data provided. 
A) 6,000 
B) 9,000 
C) 12,000 
D) Cannot be determined from the data provided.

Question 11

Bear, Inc.estimates its sales at 200,000 units in the first quarter and that sales will increase by 20,000 units each quarter over the year.They have, and desire, a 25% ending inventory of finished goods.Each unit sells for $35.40% 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) $4,746,000. 
B) $6,888,000. 
C) $8,274,000. 
D) $9,576,000. 
A) $4,746,000. 
B) $6,888,000. 
C) $8,274,000. 
D) $9,576,000.

Question 12

A company's past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected.Budgeted credit sales were: $\begin{array}{lr}
\text { January } & \$ 360,000 \
\text { February } & 216,000 \
\text { March } & 540,000
\end{array}$ The cash inflow in the month of March is expected to be

Accepted Answer

A) $406,800. 
B) $307,800. 
C) $324,000. 
D) $388,800. 
A) $406,800. 
B) $307,800. 
C) $324,000. 
D) $388,800.

Question 13

Budget development for the coming year usually starts

Accepted Answer

A) a year in advance. 
B) the first month of the year to be budgeted. 
C) several months before the end of the current year. 
D) the last month of the previous year. 
A) a year in advance. 
B) the first month of the year to be budgeted. 
C) several months before the end of the current year. 
D) the last month of the previous year.

Question 14

The following information is taken from the production budget for the first quarter: $$\begin{array} { l r } 
\text { Beginning inventory in units } & 1,200 \
\text { Sales budgeted for the quarter } & 456,000 \
\text { Production capacity in units } & 472,000
\end{array}$$ 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) 458,000 
B) 454,000 
C) 474,000 
D) 459,200 
A) 458,000 
B) 454,000 
C) 474,000 
D) 459,200

Question 15

It is important that budgets be accepted by

Accepted Answer

A) division managers only. 
B) department heads only. 
C) supervisors only. 
D) All of these answers are correct. 
A) division managers only. 
B) department heads only. 
C) supervisors only. 
D) All of these answers are correct.

Question 16

Which of the following is not a financial budget?

Accepted Answer

A) Capital expenditure budget 
B) Cash budget 
C) Manufacturing overhead budget 
D) Budgeted balance sheet 
A) Capital expenditure budget 
B) Cash budget 
C) Manufacturing overhead budget 
D) Budgeted balance sheet

Question 17

For a merchandiser, the starting point in the development of the master budget is the

Accepted Answer

A) cash budget. 
B) sales budget. 
C) selling and administrative expenses budget. 
D) budgeted income statement. 
A) cash budget. 
B) sales budget. 
C) selling and administrative expenses budget. 
D) budgeted income statement.

Question 18

A company budgeted unit sales of 204,000 units for January, 2017 and 240,000 units for February 2017.The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales.If there were 61,200 units of inventory on hand on December 31, 2016, how many units should be produced in January, 2017 in order for the company to meet its goals?

Accepted Answer

A) 214,800 units 
B) 204,000 units 
C) 193,200 units 
D) 276,000 units 
A) 214,800 units 
B) 204,000 units 
C) 193,200 units 
D) 276,000 units

Question 19

The starting point in preparing a master budget is the preparation of the

Accepted Answer

A) production budget. 
B) sales budget. 
C) purchasing budget. 
D) personnel budget. 
A) production budget. 
B) sales budget. 
C) purchasing budget. 
D) personnel budget.

Question 20

Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered.

Accepted Answer

A) True 
 B)False

Which is true of budgets?

Budgeting is usually most closely associated with which management function?

An overly optimistic sales budget may result in

In order to develop a budgeted balance sheet, the previous year's balance sheet is needed.

The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first.

Which of the following is not an operating budget?

Which of the following statements about a budgeted income statement is not true?

The production budget shows that expected unit sales are 48,000.The total required units are 54,000.What are the required production units?

Budget development for the coming year usually starts

It is important that budgets be accepted by

Which of the following is not a financial budget?

For a merchandiser, the starting point in the development of the master budget is the

The starting point in preparing a master budget is the preparation of the

Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered.

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

Exam 9: Reporting and Analyzing Long-Lived Assets

Which is true of budgets?

Budgeting is usually most closely associated with which management function?

An overly optimistic sales budget may result in

In order to develop a budgeted balance sheet, the previous year's balance sheet is needed.

The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first.

Which of the following is not an operating budget?

Which of the following statements about a budgeted income statement is not true?

The production budget shows that expected unit sales are 48,000.The total required units are 54,000.What are the required production units?

Budget development for the coming year usually starts

It is important that budgets be accepted by

Which of the following is not a financial budget?

For a merchandiser, the starting point in the development of the master budget is the

The starting point in preparing a master budget is the preparation of the

Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered.

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