Question 1

The ________ budget focuses on the income statement and the supporting schedules.

Accepted Answer

A) financial 
B) operating 
C) cash 
D) capital 
A) financial 
B) operating 
C) cash 
D) capital

Question 2

The master budget is a detailed and comprehensive analysis of the ________ of the ________ plan.

Accepted Answer

A) first year; activity-based strategic 
B) first year; strategic 
C) first year; continuous 
D) first year; long-range 
A) first year; activity-based strategic 
B) first year; strategic 
C) first year; continuous 
D) first year; long-range

Question 3

A sales forecast is ________.

Accepted Answer

A) a prediction of sales under a given set of conditions 
B) the sales budget 
C) based on input from the board of directors 
D) based on input from the audit committee 
A) a prediction of sales under a given set of conditions 
B) the sales budget 
C) based on input from the board of directors 
D) based on input from the audit committee

Question 4

An operating budget is the major part of the master budget that focuses on the balance sheet and supporting schedules.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements about long-range plans is FALSE?

Accepted Answer

A) Long-range plans provide forecasted financial statements for five to ten year periods. 
B) Long-range plans guide day-to-day operations. 
C) Companies coordinate long-range plans with capital budgets. 
D) A decision made during long-range planning is the acquisition of a plant building. 
A) Long-range plans provide forecasted financial statements for five to ten year periods. 
B) Long-range plans guide day-to-day operations. 
C) Companies coordinate long-range plans with capital budgets. 
D) A decision made during long-range planning is the acquisition of a plant building.

Question 6

One way to reduce negative attitudes of managers toward budgets is by ________.

Accepted Answer

A) zero-based budgeting 
B) activities-based budgeting 
C) long range planning 
D) participative budgeting 
A) zero-based budgeting 
B) activities-based budgeting 
C) long range planning 
D) participative budgeting

Question 7

Examples of expenses driven by sales volume include rent and insurance.

Accepted Answer

A) True 
 B)False

Question 8

Pease Company's expected sales for April are $27,600.Other information follows:   What are the total expected operating expenses for April?

Accepted Answer

A) $6,240 
B) $7,620 
C) $7,680 
D) $9,060 
A) $6,240 
B) $7,620 
C) $7,680 
D) $9,060

Question 9

How can a company avoid lying by employees when preparing a budget?

Accepted Answer

A) reward good budget forecasts 
B) reward good performance against the budget 
C) reward good budget forecasts and reward good performance against the budget 
D) reward good recipes for cooking the books 
A) reward good budget forecasts 
B) reward good performance against the budget 
C) reward good budget forecasts and reward good performance against the budget 
D) reward good recipes for cooking the books

Question 10

Misuse of budgets can lead to incentives to cheat and lie.Cheating and lying may take the form of ________.

Accepted Answer

A) making short-run decisions to increase profits that are not in the company's best long-run interests 
B) budgetary slack 
C) decreasing profits when actual profits significantly exceed the profit target 
D) all of the above 
A) making short-run decisions to increase profits that are not in the company's best long-run interests 
B) budgetary slack 
C) decreasing profits when actual profits significantly exceed the profit target 
D) all of the above

Question 11

Atlanta Company expects June sales to be $20,000.Of these sales,credit sales are expected to be $12,000.Collection of credit sales are 50% in the month of sale,40% in the month following sale and 5% two months following sale.The remaining 5% is uncollectible.________ is the expected cash collection in June from June sales.

Accepted Answer

A) $9,200 
B) $14,000 
C) $17,200 
D) $20,000 
A) $9,200 
B) $14,000 
C) $17,200 
D) $20,000

Question 12

Sales forecasts are usually prepared under the direction of the top sales executive.

Accepted Answer

A) True 
 B)False

Question 13

A budget is an example of an informal business plan.

Accepted Answer

A) True 
 B)False

Question 14

Villa 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 estimated cash disbursement in May from April purchases?

Accepted Answer

A) $11,072 
B) $11,792 
C) $13,840 
D) $17,740 
A) $11,072 
B) $11,792 
C) $13,840 
D) $17,740

Question 15

Depreciation expense is usually a disbursement listed on the cash budget.

Accepted Answer

A) True 
 B)False

Question 16

Activity-based budgets are an example of functional budgeting.

Accepted Answer

A) True 
 B)False

Question 17

The Depp Company has the following information available:
   The cost of goods sold rate is 65% and the desired ending inventory level is 25% of the next month's cost of sales.
Required:
Prepare a purchases budget for July,August and September.

Accepted Answer

The answer of The Depp Company has the following information...

Question 18

The total amount of cash collections from customers appears on the ________.

Accepted Answer

A) sales budget 
B) operating expense budget 
C) cash budget 
D) budgeted balance sheet 
A) sales budget 
B) operating expense budget 
C) cash budget 
D) budgeted balance sheet

Question 19

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

Accepted Answer

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

Question 20

Jaggers Company has the following data:   The cost of goods sold percentage is 65% of sales and the desired ending inventory level is 25% of next month's sales at cost.What are the expected total purchases for June?

Accepted Answer

A) $17,500 
B) $32,500 
C) $32,825 
D) $40,950 
A) $17,500 
B) $32,500 
C) $32,825 
D) $40,950

The ________ budget focuses on the income statement and the supporting schedules.

The master budget is a detailed and comprehensive analysis of the of the plan.

A sales forecast is ________.

An operating budget is the major part of the master budget that focuses on the balance sheet and supporting schedules.

Which of the following statements about long-range plans is FALSE?

One way to reduce negative attitudes of managers toward budgets is by ________.

Examples of expenses driven by sales volume include rent and insurance.

Pease Company's expected sales for April are $27,600.Other information follows: What are the total expected operating expenses for April?

How can a company avoid lying by employees when preparing a budget?

Misuse of budgets can lead to incentives to cheat and lie.Cheating and lying may take the form of ________.

Sales forecasts are usually prepared under the direction of the top sales executive.

A budget is an example of an informal business plan.

Villa 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 estimated cash disbursement in May from April purchases?

Depreciation expense is usually a disbursement listed on the cash budget.

Activity-based budgets are an example of functional budgeting.

The Depp Company has the following information available: The cost of goods sold rate is 65% and the desired ending inventory level is 25% of the next month's cost of sales. Required: Prepare a purchases budget for July,August and September.

The total amount of cash collections from customers appears on the ________.

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

Jaggers Company has the following data: The cost of goods sold percentage is 65% of sales and the desired ending inventory level is 25% of next month's sales at cost.What are the expected total purchases for June?

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

The ________ budget focuses on the income statement and the supporting schedules.

The master budget is a detailed and comprehensive analysis of the ________ of the ________ plan.

A sales forecast is ________.

An operating budget is the major part of the master budget that focuses on the balance sheet and supporting schedules.

Which of the following statements about long-range plans is FALSE?

One way to reduce negative attitudes of managers toward budgets is by ________.

Examples of expenses driven by sales volume include rent and insurance.

Pease Company's expected sales for April are $27,600.Other information follows: What are the total expected operating expenses for April?

How can a company avoid lying by employees when preparing a budget?

Misuse of budgets can lead to incentives to cheat and lie.Cheating and lying may take the form of ________.

Sales forecasts are usually prepared under the direction of the top sales executive.

A budget is an example of an informal business plan.

Villa 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 estimated cash disbursement in May from April purchases?

Depreciation expense is usually a disbursement listed on the cash budget.

Activity-based budgets are an example of functional budgeting.

The Depp Company has the following information available: The cost of goods sold rate is 65% and the desired ending inventory level is 25% of the next month's cost of sales. Required: Prepare a purchases budget for July,August and September.

The total amount of cash collections from customers appears on the ________.

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

Jaggers Company has the following data: The cost of goods sold percentage is 65% of sales and the desired ending inventory level is 25% of next month's sales at cost.What are the expected total purchases for June?

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 master budget is a detailed and comprehensive analysis of the of the plan.