Question 1

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 2

At January 1, 2013, Deer Corp.has beginning inventory of 2,000 surfboards.Deer estimates it will sell 10,000 units during the first quarter of 2013 with a 12% increase in sales each quarter.Deer's policy is to maintain an ending inventory equal to 25% of the next quarter's sales.Each surfboard costs $100 and is sold for $150.How much is budgeted sales revenue for the third quarter of 2013?

Accepted Answer

A) $450,000 
B) $1,950,000 
C) $1,881,600 
D) $12,544 
A) $450,000 
B) $1,950,000 
C) $1,881,600 
D) $12,544

Question 3

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 4

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: $$\begin{array} { l r } 
\text { January } & \$ 360,000 \
\text { February } & 216,000 \
\text { March } & 540,000
\end{array}$$ 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 5

Which one of the following sections would not appear on a cash budget?

Accepted Answer

A) Cash receipts 
B) Financing 
C) Investing 
D) Cash disbursements 
A) Cash receipts 
B) Financing 
C) Investing 
D) Cash disbursements

Question 6

Which one of the following is not needed in preparing a production budget?

Accepted Answer

A) Budgeted unit sales 
B) Budgeted raw materials 
C) Beginning finished goods units 
D) Ending finished goods units 
A) Budgeted unit sales 
B) Budgeted raw materials 
C) Beginning finished goods units 
D) Ending finished goods units

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

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 9

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July.The company keeps 15% of the next month's sales as ending inventory.How many units should Doe produce during June?

Accepted Answer

A) 5,745 
B) 6,600 
C) 5,655 
D) Not enough information to determine. 
A) 5,745 
B) 6,600 
C) 5,655 
D) Not enough information to determine.

Question 10

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 11

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 12

The direct materials budget contains both quantity and cost data.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

The important end-product of the operating budgets is the

Accepted Answer

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

A master budget consists of

Accepted Answer

A) an interrelated long-term plan and operating budgets. 
B) financial budgets and a long-term plan. 
C) interrelated financial budgets and operating budgets. 
D) all the accounting journals and ledgers used by a company. 
A) an interrelated long-term plan and operating budgets. 
B) financial budgets and a long-term plan. 
C) interrelated financial budgets and operating budgets. 
D) all the accounting journals and ledgers used by a company.

Question 19

In service enterprises, the critical factor in budgeting is coordinating materials and equipment with anticipated services.

Accepted Answer

A) True 
 B)False

Question 20

Teller Co.is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May.Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor.Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. 
-Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. What is the total amount to be budgeted for direct labor for the month?

Accepted Answer

A) $2,610 
B) $10,440 
C) $2,700 
D) $41,760 
A) $2,610 
B) $10,440 
C) $2,700 
D) $41,760

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

A sales forecast

Which one of the following sections would not appear on a cash budget?

Which one of the following is not needed in preparing a production budget?

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

Which of the following is not an operating budget?

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July.The company keeps 15% of the next month's sales as ending inventory.How many units should Doe produce during June?

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

Why are budgets useful in the planning process?

The direct materials budget contains both quantity and cost data.

The important end-product of the operating budgets is the

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

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

A master budget consists of

In service enterprises, the critical factor in budgeting is coordinating materials and equipment with anticipated services.

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 and Present Value Calculations

Filters

Exam 9: Reporting and Analyzing Long-Lived Assets

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

A sales forecast

Which one of the following sections would not appear on a cash budget?

Which one of the following is not needed in preparing a production budget?

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

Which of the following is not an operating budget?

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July.The company keeps 15% of the next month's sales as ending inventory.How many units should Doe produce during June?

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

Why are budgets useful in the planning process?

The direct materials budget contains both quantity and cost data.

The important end-product of the operating budgets is the

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

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

A master budget consists of

In service enterprises, the critical factor in budgeting is coordinating materials and equipment with anticipated services.

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 and Present Value Calculations

Filters