Question 1

Which one of the following lists the entities which use budgets?

Accepted Answer

A) merchandisers and service companies 
B) manufacturing, merchandisers, and service companies 
C) service, retail, and wholesale companies 
D) manufacturers only 
A) merchandisers and service companies 
B) manufacturing, merchandisers, and service companies 
C) service, retail, and wholesale companies 
D) manufacturers only

Question 2

A company's past experience indicates that 70% of its credit sales are collected in the month of sale and 28% in the next month.The remainder is never collected.The company's budgeted credit sales totalled: $$\begin{array} { l r } 
\text { January } & \$ 100,000 \
\text { February } & 90,000 \
\text { March } & 110,000
\end{array}$$ How much are expected cash receipts for February?

Accepted Answer

A) $102,200 
B) $88,200 
C) $93,800 
D) $91,000 
A) $102,200 
B) $88,200 
C) $93,800 
D) $91,000

Question 3

A merchandiser has a merchandise purchases budget, and a manufacturer has a materials purchases budget.

Accepted Answer

A) True 
 B)False

Question 4

What is the starting point for the development of the master budget by merchandisers?

Accepted Answer

A) cash budget 
B) sales budget 
C) selling and administrative expenses budget 
D) expenditures budget 
A) cash budget 
B) sales budget 
C) selling and administrative expenses budget 
D) expenditures budget

Question 5

A budget can be a means of communicating a company's objectives to external parties.

Accepted Answer

A) True 
 B)False

Question 6

Why is the sales budget the single most important source in preparing budgets?

Accepted Answer

A) All the other budgets depend on it. 
B) It enables the company to determine the unit cost of products. 
C) It is the best determination of profitability of a company. 
D) It is the only budget that requires estimates. 
A) All the other budgets depend on it. 
B) It enables the company to determine the unit cost of products. 
C) It is the best determination of profitability of a company. 
D) It is the only budget that requires estimates.

Question 7

Which statement about the cash budget is correct?

Accepted Answer

A) It can show managers when additional financing will be necessary. 
B) It can show managers when the company will experience a net loss. 
C) It can indicate when sales are insufficient. 
D) It is also called the statement of cash flows. 
A) It can show managers when additional financing will be necessary. 
B) It can show managers when the company will experience a net loss. 
C) It can indicate when sales are insufficient. 
D) It is also called the statement of cash flows.

Question 8

Which one of the following is a financial budget?

Accepted Answer

A) capital expenditure budget 
B) production budget 
C) manufacturing overhead budget 
D) sales budget 
A) capital expenditure budget 
B) production budget 
C) manufacturing overhead budget 
D) sales budget

Question 9

Which one of the following is an operating budget?

Accepted Answer

A) cash budget 
B) sales budget 
C) budgeted balance sheet 
D) capital expenditure budget 
A) cash budget 
B) sales budget 
C) budgeted balance sheet 
D) capital expenditure budget

Question 10

Tripod Exports, Inc.budgets on an annual basis for its fiscal year.The following beginning and ending inventory levels are planned for the fiscal year of July 1, 2016 to June 30, 2017: $\begin{array}{llcc}
&  \underline {  \text { June } 30,2017} &  \underline {  \text { June } 30,2016} \
\text { Raw Materials } & 3,000 \text { kilos } & 2,000 \text { kilos }
\end{array}$
 Three kilos of raw materials are needed to produce each unit of finished product.If Tripod Exports plans to produce 280,000 units during the 2016-2017 fiscal year, how many kilos of materials will the company need to purchase for its production during the year?

Accepted Answer

A) 841,000 
B) 843,000 
C) 840,000 
D) 839,000 
A) 841,000 
B) 843,000 
C) 840,000 
D) 839,000

Question 11

Lewis Hats is planning to sell 650 straw hats in April.Each hat requires ½ kilogram of straw and ¼ hour of direct labour.Straw costs $0.20 per kilogram and employees of the company are paid $22 per hour.Lewis has 80 kilograms of straw and 40 hats in beginning inventory and wants to have 50 kilograms of straw and 60 hats in ending inventory.How many units should Lewis Hats produce in April?

Accepted Answer

A) 650 
B) 670 
C) 610 
D) 710 
A) 650 
B) 670 
C) 610 
D) 710

Question 12

The budgeted income statement indicates the expected amount of cash expected to be acquired from operations.

Accepted Answer

A) True 
 B)False

Question 13

Which one of the following is necessary if a company expects its budget to be effective?

Accepted Answer

A) The company must be operating at less than capacity. 
B) The budget period must cover more than one year. 
C) The company's organizational structure must be sound. 
D) The company must have sufficient cash for operations. 
A) The company must be operating at less than capacity. 
B) The budget period must cover more than one year. 
C) The company's organizational structure must be sound. 
D) The company must have sufficient cash for operations.

Question 14

Leak Company sells only on credit.It reported the following information for 2016: $$\begin{array} { l l l l l } 
& \underline { \text { September } }  & \underline { \text { October } } & \underline { \text { November } }  & \underline { \text { December } } \
\text { Budgeted sales } &\$900,000&\$800,000&\$850,000&\$960,000
\end{array}$$ Customer amounts on account are collected 45% in the month of sale and 55% in the following month.How much is the November 30, 2016 budgeted Accounts Receivable?

Accepted Answer

A) $467,500 
B) $382,500 
C) $827,500 
D) $528,000 
A) $467,500 
B) $382,500 
C) $827,500 
D) $528,000

Question 15

Which one of the factors below is NOT a major influence on the length of budget periods?

Accepted Answer

A) the nature of the organization 
B) the type of budget 
C) prevailing business conditions 
D) the profitability of the company 
A) the nature of the organization 
B) the type of budget 
C) prevailing business conditions 
D) the profitability of the company

Question 16

Which budget provides the information needed to prepare the direct labour budget?

Accepted Answer

A) income budget 
B) production budget 
C) materials budget 
D) sales budget 
A) income budget 
B) production budget 
C) materials budget 
D) sales budget

Question 17

The direct materials budget contains only quantity data so the purchasing department knows how much materials should be purchased.

Accepted Answer

A) True 
 B)False

Question 18

Farley Company reported the following information for 2016: $$\begin{array} { l c c c c c } 
& \text { September } & \text { October } & \text { November } & \text { December } & \text { January } \
\text { Budgeted sales } & \$ 240,000 & \$ 310,000 & \$ 290,000 & \$ 360,000 & \$ 200,000 \
\text { Budgeted purchases } & \$ 90,000 & \$ 120,000 & \$ 128,000 & \$ 144,000 & \$ 88,000
\end{array}$$ All sales are on credit. 
-Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
-Cost of goods sold is 35% of sales.
-Farley purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
-Accounts payable is used only for inventory acquisitions.
How much cash will Farley receive during November?

Accepted Answer

A) $145,000 
B) $325,000 
C) $300,000 
D) $290,000 
A) $145,000 
B) $325,000 
C) $300,000 
D) $290,000

Question 19

Surprise Company's sales budget showed expected sales of 13,400 widgets.Beginning finished goods contained 1,200 widgets.The company determined that 14,100 units should be produced.How many widgets will the company have on hand at the end of the year?

Accepted Answer

A) 500 
B) 1,200 
C) 1,900 
D) 700 
A) 500 
B) 1,200 
C) 1,900 
D) 700

Question 20

Which one of the following expenses would most likely appear on a Selling and Administrative Expense Budget?

Accepted Answer

A) indirect materials 
B) machine depreciation 
C) sales commissions 
D) indirect labour 
A) indirect materials 
B) machine depreciation 
C) sales commissions 
D) indirect labour

Which one of the following lists the entities which use budgets?

A merchandiser has a merchandise purchases budget, and a manufacturer has a materials purchases budget.

What is the starting point for the development of the master budget by merchandisers?

A budget can be a means of communicating a company's objectives to external parties.

Why is the sales budget the single most important source in preparing budgets?

Which statement about the cash budget is correct?

Which one of the following is a financial budget?

Which one of the following is an operating budget?

The budgeted income statement indicates the expected amount of cash expected to be acquired from operations.

Which one of the following is necessary if a company expects its budget to be effective?

Leak Company sells only on credit.It reported the following information for 2016: Budgeted sales \9 00,000 \8 00,000 \8 50,000 \9 60,000 Customer amounts on account are collected 45% in the month of sale and 55% in the following month.How much is the November 30, 2016 budgeted Accounts Receivable?

Which one of the factors below is NOT a major influence on the length of budget periods?

Which budget provides the information needed to prepare the direct labour budget?

The direct materials budget contains only quantity data so the purchasing department knows how much materials should be purchased.

Surprise Company's sales budget showed expected sales of 13,400 widgets.Beginning finished goods contained 1,200 widgets.The company determined that 14,100 units should be produced.How many widgets will the company have on hand at the end of the year?

Which one of the following expenses would most likely appear on a Selling and Administrative Expense Budget?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Activity-Based Costing

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 10: Budgetary Planning

Which one of the following lists the entities which use budgets?

A merchandiser has a merchandise purchases budget, and a manufacturer has a materials purchases budget.

What is the starting point for the development of the master budget by merchandisers?

A budget can be a means of communicating a company's objectives to external parties.

Why is the sales budget the single most important source in preparing budgets?

Which statement about the cash budget is correct?

Which one of the following is a financial budget?

Which one of the following is an operating budget?

The budgeted income statement indicates the expected amount of cash expected to be acquired from operations.

Which one of the following is necessary if a company expects its budget to be effective?

Leak Company sells only on credit.It reported the following information for 2016: Budgeted sales \9 00,000 \8 00,000 \8 50,000 \9 60,000 Customer amounts on account are collected 45% in the month of sale and 55% in the following month.How much is the November 30, 2016 budgeted Accounts Receivable?

Which one of the factors below is NOT a major influence on the length of budget periods?

Which budget provides the information needed to prepare the direct labour budget?

The direct materials budget contains only quantity data so the purchasing department knows how much materials should be purchased.

Surprise Company's sales budget showed expected sales of 13,400 widgets.Beginning finished goods contained 1,200 widgets.The company determined that 14,100 units should be produced.How many widgets will the company have on hand at the end of the year?

Which one of the following expenses would most likely appear on a Selling and Administrative Expense Budget?

Managerial Accounting

Managerial Cost Concepts and Cost Behaviour Analysis

Job-Order Cost Accounting

Process Cost Accounting

Activity-Based Costing

Decision-Making: Costvolumeprofit

Incremental Analysis

Alternative Inventory Costing Methods: a Decision-Making Perspective

Pricing

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters