Question 1

Budgets are generally more effective if they are ________.

Accepted Answer

A) created with the active participation of all affected employees 
B) understood and accepted by affected managers 
C) supported by top management 
D) all of the above 
A) created with the active participation of all affected employees 
B) understood and accepted by affected managers 
C) supported by top management 
D) all of the above

Question 2

Which of the following statements is FALSE about a strategic plan?

Accepted Answer

A) A strategic plan does not deal with a specific time period. 
B) A strategic plan does not produce forecasted financial statements. 
C) A strategic plan guides day-to-day operations. 
D) A strategic plan provides an overall framework for a long-range plan. 
A) A strategic plan does not deal with a specific time period. 
B) A strategic plan does not produce forecasted financial statements. 
C) A strategic plan guides day-to-day operations. 
D) A strategic plan provides an overall framework for a long-range plan.

Question 3

The Unhappy Company is preparing a budgeted income statement.The dollar amount of Cost of Goods Sold comes from ________.

Accepted Answer

A) the sales budget 
B) the sales forecast 
C) the purchases budget 
D) the operating expense budget 
A) the sales budget 
B) the sales forecast 
C) the purchases budget 
D) the operating expense budget

Question 4

You may have various forecasts of sales corresponding to different levels of advertising.The ________ for the one level of advertising you decide to implement becomes the ________.

Accepted Answer

A) sales forecast; sales budget 
B) sales budget; sales forecast 
C) sales forecast; sales goal 
D) sales goal; sales forecast 
A) sales forecast; sales budget 
B) sales budget; sales forecast 
C) sales forecast; sales goal 
D) sales goal; sales forecast

Question 5

A budget is a qualitative expression of a plan of action.

Accepted Answer

A) True 
 B)False

Question 6

A sales budget is a prediction of sales under a given set of conditions.

Accepted Answer

A) True 
 B)False

Question 7

Budgetary slack helps buffer managers from budget cuts imposed by higher-level management.

Accepted Answer

A) True 
 B)False

Question 8

Voyager Company has the following data:   The cost of goods sold percentage is 80% of sales and the desired ending inventory level is 25% of next month's sales at cost.What is the beginning inventory on August 1?

Accepted Answer

A) $4,200 
B) $8,450 
C) $9,600 
D) $38,400 
A) $4,200 
B) $8,450 
C) $9,600 
D) $38,400

Question 9

Schlichting 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 amount should be borrowed at June 30,2010?

Accepted Answer

A) $0 
B) $2,000 
C) $3,000 
D) $4,000 
A) $0 
B) $2,000 
C) $3,000 
D) $4,000

Question 10

The beginning available cash balance equals the beginning cash balance plus the minimum cash balance desired.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is NOT a reason for budgetary slack?

Accepted Answer

A) to buffer managers from budget cuts imposed by top management 
B) to provide protection against cost increases or revenue shortfalls due to unforeseen events 
C) to facilitate attainment of performance goals 
D) to impose a formal structure for planning purposes 
A) to buffer managers from budget cuts imposed by top management 
B) to provide protection against cost increases or revenue shortfalls due to unforeseen events 
C) to facilitate attainment of performance goals 
D) to impose a formal structure for planning purposes

Question 12

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

Accepted Answer

A) sales budget 
B) operating expense budget 
C) cash budget 
D) budgeted income statement 
A) sales budget 
B) operating expense budget 
C) cash budget 
D) budgeted income statement

Question 13

Johnson Company has the following data:
   Budgeted Operating Expenses Per Month
   Required:
Prepare a schedule of cash disbursements for operating expenses for April,May and June.All cash expenses are paid when incurred.

Accepted Answer

The answer of Johnson Company has the following data:
 ...

Question 14

Dubuque Company has the following sales budget:
   Collections of credit sales are 40% in the month of sale,50% in the month after sale and 10% two months after sale.No uncollectible accounts are expected.
Required:
Prepare a schedule of cash collections for April.

Accepted Answer

The answer of Dubuque Company has the following sales budget:
...

Question 15

Denison Company has the following information:   Budgeted Expenses Per Month
  All cash expenses are paid as incurred.What are the total cash disbursements budgeted for the month of January?

Accepted Answer

A) $28,200 
B) $30,000 
C) $30,040 
D) $33,040 
A) $28,200 
B) $30,000 
C) $30,040 
D) $33,040

Question 16

The most forward-looking and least detailed budget is the strategic plan.

Accepted Answer

A) True 
 B)False

Question 17

________ budgeting is when budgets are formulated with the active participation of all affected employees.

Accepted Answer

A) Rolling 
B) Team 
C) Participative 
D) Financial 
A) Rolling 
B) Team 
C) Participative 
D) Financial

Question 18

Short-term budgets help managers manage ________.Long-term budgets reinforce a company's ________.

Accepted Answer

A) day-to-day operations; ethical standards 
B) day-to-day operations; long-term goals 
C) short-term capital budgeting problems; operational goals 
D) short-term financing needs; operational goals 
A) day-to-day operations; ethical standards 
B) day-to-day operations; long-term goals 
C) short-term capital budgeting problems; operational goals 
D) short-term financing needs; operational goals

Question 19

The cash budget begins with the ending cash balance from the previous period.

Accepted Answer

A) True 
 B)False

Question 20

A good budget process communicates from the top down,but not from the bottom up.

Accepted Answer

A) True 
 B)False

Budgets are generally more effective if they are ________.

Which of the following statements is FALSE about a strategic plan?

The Unhappy Company is preparing a budgeted income statement.The dollar amount of Cost of Goods Sold comes from ________.

You may have various forecasts of sales corresponding to different levels of advertising.The for the one level of advertising you decide to implement becomes the .

A budget is a qualitative expression of a plan of action.

A sales budget is a prediction of sales under a given set of conditions.

Budgetary slack helps buffer managers from budget cuts imposed by higher-level management.

Voyager Company has the following data: The cost of goods sold percentage is 80% of sales and the desired ending inventory level is 25% of next month's sales at cost.What is the beginning inventory on August 1?

Schlichting 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 amount should be borrowed at June 30,2010?

The beginning available cash balance equals the beginning cash balance plus the minimum cash balance desired.

Which of the following is NOT a reason for budgetary slack?

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

Johnson Company has the following data: Budgeted Operating Expenses Per Month Required: Prepare a schedule of cash disbursements for operating expenses for April,May and June.All cash expenses are paid when incurred.

Dubuque Company has the following sales budget: Collections of credit sales are 40% in the month of sale,50% in the month after sale and 10% two months after sale.No uncollectible accounts are expected. Required: Prepare a schedule of cash collections for April.

Denison Company has the following information: Budgeted Expenses Per Month All cash expenses are paid as incurred.What are the total cash disbursements budgeted for the month of January?

The most forward-looking and least detailed budget is the strategic plan.

________ budgeting is when budgets are formulated with the active participation of all affected employees.

Short-term budgets help managers manage .Long-term budgets reinforce a company's .

The cash budget begins with the ending cash balance from the previous period.

A good budget process communicates from the top down,but not from the bottom up.

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

Budgets are generally more effective if they are ________.

Which of the following statements is FALSE about a strategic plan?

The Unhappy Company is preparing a budgeted income statement.The dollar amount of Cost of Goods Sold comes from ________.

You may have various forecasts of sales corresponding to different levels of advertising.The ________ for the one level of advertising you decide to implement becomes the ________.

A budget is a qualitative expression of a plan of action.

A sales budget is a prediction of sales under a given set of conditions.

Budgetary slack helps buffer managers from budget cuts imposed by higher-level management.

Voyager Company has the following data: The cost of goods sold percentage is 80% of sales and the desired ending inventory level is 25% of next month's sales at cost.What is the beginning inventory on August 1?

Schlichting 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 amount should be borrowed at June 30,2010?

The beginning available cash balance equals the beginning cash balance plus the minimum cash balance desired.

Which of the following is NOT a reason for budgetary slack?

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

Johnson Company has the following data: Budgeted Operating Expenses Per Month Required: Prepare a schedule of cash disbursements for operating expenses for April,May and June.All cash expenses are paid when incurred.

Dubuque Company has the following sales budget: Collections of credit sales are 40% in the month of sale,50% in the month after sale and 10% two months after sale.No uncollectible accounts are expected. Required: Prepare a schedule of cash collections for April.

Denison Company has the following information: Budgeted Expenses Per Month All cash expenses are paid as incurred.What are the total cash disbursements budgeted for the month of January?

The most forward-looking and least detailed budget is the strategic plan.

________ budgeting is when budgets are formulated with the active participation of all affected employees.

Short-term budgets help managers manage ________.Long-term budgets reinforce a company's ________.

The cash budget begins with the ending cash balance from the previous period.

A good budget process communicates from the top down,but not from the bottom up.

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

You may have various forecasts of sales corresponding to different levels of advertising.The for the one level of advertising you decide to implement becomes the .

Short-term budgets help managers manage .Long-term budgets reinforce a company's .