Question 1

Which of the following is NOT a component of the operating budget?

Accepted Answer

A) capital budget 
B) purchases budget 
C) budgeted income statement 
D) operating expense budget 
A) capital budget 
B) purchases budget 
C) budgeted income statement 
D) operating expense budget A

Question 2

What is the final result of the operating budget process?

Accepted Answer

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

Question 3

Budgeting typically uses the future activities of the organization as a starting point for planning.

Accepted Answer

A) True 
 B)False  False

Question 4

The financial budget focuses on the effects that the ________ and other plans will have on ________.

Accepted Answer

A) master budget; resources 
B) continuous budget; resources 
C) long-range plan; activities 
D) operating budget; cash balances 
A) master budget; resources 
B) continuous budget; resources 
C) long-range plan; activities 
D) operating budget; cash balances

Question 5

Caravan Company has the following data:   The cost of goods sold percentage is 70% of sales and the desired ending inventory level is 25% of next month's sales at cost.________ was the beginning inventory on May 1.

Accepted Answer

A) $7,000 
B) $8,050 
C) $8,750 
D) $12,075 
A) $7,000 
B) $8,050 
C) $8,750 
D) $12,075

Question 6

The two main components of the master budget are the ________.

Accepted Answer

A) cash budget and the capital budget 
B) purchases budget and the budgeted income statement 
C) budgeted income statement and the budgeted balance sheet 
D) operating budget and the financial budget 
A) cash budget and the capital budget 
B) purchases budget and the budgeted income statement 
C) budgeted income statement and the budgeted balance sheet 
D) operating budget and the financial budget

Question 7

Goldberg Company is preparing a cash budget for the month of June.The following information is available:   The minimum cash balance desired is $10,000.What amount of money must be borrowed at June 30,2010 to meet the minimum cash balance?

Accepted Answer

A) $9,000 
B) $10,000 
C) $11,000 
D) $13,000 
A) $9,000 
B) $10,000 
C) $11,000 
D) $13,000

Question 8

The following sales budget has been prepared:   Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What are the estimated cash collections in November?

Accepted Answer

A) $130,000 
B) $197,000 
C) $327,000 
D) $340,000 
A) $130,000 
B) $197,000 
C) $327,000 
D) $340,000

Question 9

The Happy Company is preparing a budgeted income statement.The dollar amount for Sales comes from ________.

Accepted Answer

A) the sales forecast 
B) the sales manager 
C) the sales budget 
D) the sales from competitors 
A) the sales forecast 
B) the sales manager 
C) the sales budget 
D) the sales from competitors

Question 10

________ models are mathematical models of the master budget that can react to any set of assumptions about sales,costs and product mix.

Accepted Answer

A) Strategic 
B) Long-range 
C) Financial planning 
D) Operating budget 
A) Strategic 
B) Long-range 
C) Financial planning 
D) Operating budget

Question 11

Taurus Company has the following data:   The gross profit rate is 40% of sales and ending inventory at December 31 was $19,440.Desired ending inventory levels are 30% of next month's sales at cost.What are the expected total purchases for February?

Accepted Answer

A) $79,200 
B) $81,360 
C) $102,960 
D) $105,120 
A) $79,200 
B) $81,360 
C) $102,960 
D) $105,120

Question 12

Managers may ________ their budgeted costs or ________ their budgeted revenues to create a budget target that is easier to achieve.

Accepted Answer

A) understate; overstate 
B) overstate; understate 
C) understate; understate 
D) overstate; overstate 
A) understate; overstate 
B) overstate; understate 
C) understate; understate 
D) overstate; overstate

Question 13

No matter how many technical experts a company uses in forecasting,the sales budget should ultimately be the responsibility of the ________.

Accepted Answer

A) staff function 
B) audit committee 
C) line management 
D) board of directors 
A) staff function 
B) audit committee 
C) line management 
D) board of directors

Question 14

Silent Company is preparing a cash budget for the month of June.The following information is available:   The minimum cash balance desired is $5,000.What is the cash balance on June 30,2010?

Accepted Answer

A) $8,000 
B) $9,000 
C) $10,000 
D) $13,000 
A) $8,000 
B) $9,000 
C) $10,000 
D) $13,000

Question 15

Cheating in the context of the budget process does not include making short-run decisions to increase profits that are not in the company's best long-run interests.

Accepted Answer

A) True 
 B)False

Question 16

A cash budget is a business plan that includes a set of schedules and financial statements.

Accepted Answer

A) True 
 B)False

Question 17

The financial budget includes ________.

Accepted Answer

A) the capital budget and the sales budget 
B) the capital budget and the budgeted income statement 
C) the capital budget,the cash budget and the budgeted balance sheet 
D) the cash budget and the purchases budget 
A) the capital budget and the sales budget 
B) the capital budget and the budgeted income statement 
C) the capital budget,the cash budget and the budgeted balance sheet 
D) the cash budget and the purchases budget

Question 18

Decisions made during long-range planning include ________.

Accepted Answer

A) addition or deletion of product line 
B) location of new plant 
C) purchase of equipment 
D) all of the above 
A) addition or deletion of product line 
B) location of new plant 
C) purchase of equipment 
D) all of the above

Question 19

The financial budget process ends with the ________.

Accepted Answer

A) budgeted balance sheet 
B) budgeted income statement 
C) budgeted cash flow statement 
D) budgeted statement of stockholders' equity 
A) budgeted balance sheet 
B) budgeted income statement 
C) budgeted cash flow statement 
D) budgeted statement of stockholders' equity

Question 20

Duck Company has the following information:   Purchases are paid as follows:
10% in the month of purchase
50% one month after purchase
40% two months after purchase
What is the expected balance in Accounts Payable at March 31?

Accepted Answer

A) $2,900 
B) $18,312 
C) $30,520 
D) $39,068 
A) $2,900 
B) $18,312 
C) $30,520 
D) $39,068

Which of the following is NOT a component of the operating budget?

What is the final result of the operating budget process?

Budgeting typically uses the future activities of the organization as a starting point for planning.

The financial budget focuses on the effects that the and other plans will have on .

Caravan Company has the following data: The cost of goods sold percentage is 70% of sales and the desired ending inventory level is 25% of next month's sales at cost.________ was the beginning inventory on May 1.

The two main components of the master budget are the ________.

Goldberg Company is preparing a cash budget for the month of June.The following information is available: The minimum cash balance desired is $10,000.What amount of money must be borrowed at June 30,2010 to meet the minimum cash balance?

The following sales budget has been prepared: Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What are the estimated cash collections in November?

The Happy Company is preparing a budgeted income statement.The dollar amount for Sales comes from ________.

________ models are mathematical models of the master budget that can react to any set of assumptions about sales,costs and product mix.

Taurus Company has the following data: The gross profit rate is 40% of sales and ending inventory at December 31 was $19,440.Desired ending inventory levels are 30% of next month's sales at cost.What are the expected total purchases for February?

Managers may their budgeted costs or their budgeted revenues to create a budget target that is easier to achieve.

No matter how many technical experts a company uses in forecasting,the sales budget should ultimately be the responsibility of the ________.

Silent Company is preparing a cash budget for the month of June.The following information is available: The minimum cash balance desired is $5,000.What is the cash balance on June 30,2010?

Cheating in the context of the budget process does not include making short-run decisions to increase profits that are not in the company's best long-run interests.

A cash budget is a business plan that includes a set of schedules and financial statements.

The financial budget includes ________.

Decisions made during long-range planning include ________.

The financial budget process ends with the ________.

Duck Company has the following information: Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase What is the expected balance in Accounts Payable at March 31?

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 7: Introduction to Budgets and Preparing the Master Budget

Which of the following is NOT a component of the operating budget?

What is the final result of the operating budget process?

Budgeting typically uses the future activities of the organization as a starting point for planning.

The financial budget focuses on the effects that the ________ and other plans will have on ________.

Caravan Company has the following data: The cost of goods sold percentage is 70% of sales and the desired ending inventory level is 25% of next month's sales at cost.________ was the beginning inventory on May 1.

The two main components of the master budget are the ________.

Goldberg Company is preparing a cash budget for the month of June.The following information is available: The minimum cash balance desired is $10,000.What amount of money must be borrowed at June 30,2010 to meet the minimum cash balance?

The following sales budget has been prepared: Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What are the estimated cash collections in November?

The Happy Company is preparing a budgeted income statement.The dollar amount for Sales comes from ________.

________ models are mathematical models of the master budget that can react to any set of assumptions about sales,costs and product mix.

Taurus Company has the following data: The gross profit rate is 40% of sales and ending inventory at December 31 was $19,440.Desired ending inventory levels are 30% of next month's sales at cost.What are the expected total purchases for February?

Managers may ________ their budgeted costs or ________ their budgeted revenues to create a budget target that is easier to achieve.

No matter how many technical experts a company uses in forecasting,the sales budget should ultimately be the responsibility of the ________.

Silent Company is preparing a cash budget for the month of June.The following information is available: The minimum cash balance desired is $5,000.What is the cash balance on June 30,2010?

Cheating in the context of the budget process does not include making short-run decisions to increase profits that are not in the company's best long-run interests.

A cash budget is a business plan that includes a set of schedules and financial statements.

The financial budget includes ________.

Decisions made during long-range planning include ________.

The financial budget process ends with the ________.

Duck Company has the following information: Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase What is the expected balance in Accounts Payable at March 31?

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

The financial budget focuses on the effects that the and other plans will have on .

Managers may their budgeted costs or their budgeted revenues to create a budget target that is easier to achieve.