Question 1

The operating budget is a better measure of a company's overall performance than the financial budget.

Accepted Answer

A) True 
 B)False

Question 2

Spark Company has the following data:
   Purchases are paid as follows:
10% in the month of purchase
80% one month after purchase
10% two months after purchase
Required:
Prepare a schedule of cash disbursements for purchases for March,April and May.

Accepted Answer

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

Question 3

The activity-based budgeting system emphasizes ________.

Accepted Answer

A) the resources needed by a company 
B) the preparation of budgets by function 
C) the attainment of long-range goals 
D) activities and their consumption of resources 
A) the resources needed by a company 
B) the preparation of budgets by function 
C) the attainment of long-range goals 
D) activities and their consumption of resources

Question 4

San Francisco Company expects August sales to be $32,000.Approximately 40% of sales are cash sales.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 August from August sales.

Accepted Answer

A) $8,000 
B) $12,000 
C) $16,000 
D) $22,400 
A) $8,000 
B) $12,000 
C) $16,000 
D) $22,400

Question 5

The master budgeting process summarizes the key decisions regarding all aspects of a company's value chain.

Accepted Answer

A) True 
 B)False

Question 6

Systematically varying budget data input to determine the effects of each change on the budget is called ________ analysis.

Accepted Answer

A) operating budget 
B) financial budget 
C) sensitivity 
D) master budget 
A) operating budget 
B) financial budget 
C) sensitivity 
D) master budget

Question 7

A(n)________ starts with the assumption that current activities in a company will not automatically continue in the next period.

Accepted Answer

A) activity-based budget 
B) strategic budget 
C) master budget 
D) zero-base budget 
A) activity-based budget 
B) strategic budget 
C) master budget 
D) zero-base budget

Question 8

Budgets that focus on the budgeted cost of activities required to produce and sell products are called ________.

Accepted Answer

A) strategic budgets 
B) master budgets 
C) activity-based budgets 
D) rolling budgets 
A) strategic budgets 
B) master budgets 
C) activity-based budgets 
D) rolling budgets

Question 9

Important factors used to forecast sales for a company include all of the following items EXCEPT ________.

Accepted Answer

A) past patterns of sales 
B) market research studies 
C) competitors' actions 
D) estimates made by the production staff 
A) past patterns of sales 
B) market research studies 
C) competitors' actions 
D) estimates made by the production staff

Question 10

The most effective budget processes facilitate communication from top management to ________ and from lower level managers and employees to ________.

Accepted Answer

A) the SEC; the audit committee 
B) stockholders; creditors 
C) lower level managers and employees; top management 
D) creditors; stockholders 
A) the SEC; the audit committee 
B) stockholders; creditors 
C) lower level managers and employees; top management 
D) creditors; stockholders

Question 11

________ detail the planned expenditures for facilities,equipment,new products and other long-term investments.

Accepted Answer

A) Cash budgets 
B) Capital budgets 
C) Operating budgets 
D) Purchases budgets 
A) Cash budgets 
B) Capital budgets 
C) Operating budgets 
D) Purchases budgets

Question 12

Godwin 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 are the net cash receipts and disbursements for the month of June?

Accepted Answer

A) $(8,000) 
B) $(9,000) 
C) $(11,000) 
D) $(13,000) 
A) $(8,000) 
B) $(9,000) 
C) $(11,000) 
D) $(13,000)

Question 13

Financial planning models ________.

Accepted Answer

A) focus on the budgeted balance sheet 
B) focus on the budgeted income statement 
C) allow managers to assess the predicted impacts of various alternatives before final decisions are selected 
D) allow managers to assess the predicted impacts of the master budget 
A) focus on the budgeted balance sheet 
B) focus on the budgeted income statement 
C) allow managers to assess the predicted impacts of various alternatives before final decisions are selected 
D) allow managers to assess the predicted impacts of the master budget

Question 14

Preparing a master budget using a spreadsheet is a quick and easy task the first time it is carried out.

Accepted Answer

A) True 
 B)False

Question 15

A decision made during long-range planning includes whether to delete a product from a company's product line.

Accepted Answer

A) True 
 B)False

Question 16

The elements of a financial budget for a merchandising firm include the capital budget,the cash budget and the budgeted balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Falcons Company expects May sales to be $10,000.Approximately 40% of sales are cash sales.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 May from May sales.

Accepted Answer

A) $4,000 
B) $5,000 
C) $7,000 
D) $10,000 
A) $4,000 
B) $5,000 
C) $7,000 
D) $10,000

Question 18

Daily Company has the following information:
   Daily Company wants to keep a minimum cash balance of $10,000.
Required:
Prepare a cash budget for June.

Accepted Answer

@#IMG-DLM& Cash rece

Question 19

Financial planning models enable managers to get answers to "what-if" questions.

Accepted Answer

A) True 
 B)False

Question 20

Misalignment between the ________ stressed in budgets and ________ used to reward employees and managers can limit the advantages of budgeting.

Accepted Answer

A) performance goals; participative goals 
B) performance goals; performance measures 
C) bonuses; sales goals 
D) bonuses; resource goals 
A) performance goals; participative goals 
B) performance goals; performance measures 
C) bonuses; sales goals 
D) bonuses; resource goals

The operating budget is a better measure of a company's overall performance than the financial budget.

Spark Company has the following data: Purchases are paid as follows: 10% in the month of purchase 80% one month after purchase 10% two months after purchase Required: Prepare a schedule of cash disbursements for purchases for March,April and May.

The activity-based budgeting system emphasizes ________.

The master budgeting process summarizes the key decisions regarding all aspects of a company's value chain.

Systematically varying budget data input to determine the effects of each change on the budget is called ________ analysis.

A(n)________ starts with the assumption that current activities in a company will not automatically continue in the next period.

Budgets that focus on the budgeted cost of activities required to produce and sell products are called ________.

Important factors used to forecast sales for a company include all of the following items EXCEPT ________.

The most effective budget processes facilitate communication from top management to and from lower level managers and employees to .

________ detail the planned expenditures for facilities,equipment,new products and other long-term investments.

Godwin 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 are the net cash receipts and disbursements for the month of June?

Financial planning models ________.

Preparing a master budget using a spreadsheet is a quick and easy task the first time it is carried out.

A decision made during long-range planning includes whether to delete a product from a company's product line.

The elements of a financial budget for a merchandising firm include the capital budget,the cash budget and the budgeted balance sheet.

Daily Company has the following information: Daily Company wants to keep a minimum cash balance of $10,000. Required: Prepare a cash budget for June.

Financial planning models enable managers to get answers to "what-if" questions.

Misalignment between the stressed in budgets and used to reward employees and managers can limit the advantages of budgeting.

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 operating budget is a better measure of a company's overall performance than the financial budget.

Spark Company has the following data: Purchases are paid as follows: 10% in the month of purchase 80% one month after purchase 10% two months after purchase Required: Prepare a schedule of cash disbursements for purchases for March,April and May.

The activity-based budgeting system emphasizes ________.

The master budgeting process summarizes the key decisions regarding all aspects of a company's value chain.

Systematically varying budget data input to determine the effects of each change on the budget is called ________ analysis.

A(n)________ starts with the assumption that current activities in a company will not automatically continue in the next period.

Budgets that focus on the budgeted cost of activities required to produce and sell products are called ________.

Important factors used to forecast sales for a company include all of the following items EXCEPT ________.

The most effective budget processes facilitate communication from top management to ________ and from lower level managers and employees to ________.

________ detail the planned expenditures for facilities,equipment,new products and other long-term investments.

Godwin 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 are the net cash receipts and disbursements for the month of June?

Financial planning models ________.

Preparing a master budget using a spreadsheet is a quick and easy task the first time it is carried out.

A decision made during long-range planning includes whether to delete a product from a company's product line.

The elements of a financial budget for a merchandising firm include the capital budget,the cash budget and the budgeted balance sheet.

Daily Company has the following information: Daily Company wants to keep a minimum cash balance of $10,000. Required: Prepare a cash budget for June.

Financial planning models enable managers to get answers to "what-if" questions.

Misalignment between the ________ stressed in budgets and ________ used to reward employees and managers can limit the advantages of budgeting.

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 most effective budget processes facilitate communication from top management to and from lower level managers and employees to .

Misalignment between the stressed in budgets and used to reward employees and managers can limit the advantages of budgeting.