Question 1

A rolling budget is a specific budget application relevant only to a merchandising company.

Accepted Answer

A) True 
 B)False

Question 2

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units. 
-Budgeted purchases of Product B for the year would be:

Accepted Answer

A) 24,500 units 
B) 22,500 units 
C) 16,500 units 
D) 26,500 units 
E) 20,500 units 
A) 24,500 units 
B) 22,500 units 
C) 16,500 units 
D) 26,500 units 
E) 20,500 units

Question 3

A formal statement of future plans, usually expressed in monetary terms, is a:

Accepted Answer

A) Variance report 
B) Position statement 
C) Budget 
D) Prospectus 
E) Variance analysis 
A) Variance report 
B) Position statement 
C) Budget 
D) Prospectus 
E) Variance analysis

Question 4

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units. 
-A quantity of merchandise or materials over the minimum needed reduce the risk of running short is called:

Accepted Answer

A) Just-in-time inventory. 
B) Budgeted stock. 
C) Continuous inventory. 
D) Capital stock. 
E) Safety stock. 
A) Just-in-time inventory. 
B) Budgeted stock. 
C) Continuous inventory. 
D) Capital stock. 
E) Safety stock.

Question 5

Assume that total sales for January and February are budgeted to be $50,000 and $100,000, respectively.What are the expected cash receipts for February from current and past sales? Round all calculations to full dollar amounts.

Accepted Answer

A) $80,500 
B) $71,500 
C) $34,500 
D) $61,500 
E) $59,500 
A) $80,500 
B) $71,500 
C) $34,500 
D) $61,500 
E) $59,500

Question 6

A plan that lists the types and amounts of selling expenses expected during the budget period is called a(n):

Accepted Answer

A) Sales budget 
B) Operating budget 
C) Capital expenditures budget 
D) Selling expense budget 
E) Purchases budget 
A) Sales budget 
B) Operating budget 
C) Capital expenditures budget 
D) Selling expense budget 
E) Purchases budget

Question 7

What is a merchandise purchases budget? How is the merchandise purchases budget constructed?

Accepted Answer

A merchandise purchases budget is used t

Question 8

The manufacturing budget shows only the direct materials needed for production.

Accepted Answer

A) True 
 B)False

Question 9

A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit.The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units.Total June sales are anticipated to be:

Accepted Answer

A) $63,000 
B) $67,500 
C) $61,250 
D) $74,250 
E) $60,000 
A) $63,000 
B) $67,500 
C) $61,250 
D) $74,250 
E) $60,000

Question 10

A budget is a formal statement of future plans, usually expressed in monetary terms.

Accepted Answer

A) True 
 B)False

Question 11

The overall coordinating activity of the budget process is the responsibility of the:

Accepted Answer

A) Chief accounting officer 
B) Chief executive officer (CEO) 
C) Chief financial officer (CFO) 
D) Budget committee 
E) Board of directors 
A) Chief accounting officer 
B) Chief executive officer (CEO) 
C) Chief financial officer (CFO) 
D) Budget committee 
E) Board of directors

Question 12

A company expects its September sales to be 15% higher than its August sales of $140,000.Purchases were $75,000 in August and are expected to be $85,000 in September.All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month.Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month.The beginning cash balance on September 1 is $71,500.The ending cash balance on September 30 would be:

Accepted Answer

A) $121,800 
B) $148,700 
C) $140,300 
D) $143,700 
E) $135,300 
A) $121,800 
B) $148,700 
C) $140,300 
D) $143,700 
E) $135,300

Question 13

What is a sales budget? How is the sales budget prepared?

Accepted Answer

The sales budget shows planned sales uni

Question 14

A ________________________ is a continuously revised budget that adds future months or quarters to replace months or quarters that have lapsed.

Accepted Answer

The answer of A ________________________ is a continuously revised budget...

Question 15

The financial budgets of a business include the cash budget, the budgeted income statement, and the budgeted balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a financial budget?

Accepted Answer

A) Sales budget. 
B) Budgeted balance sheet. 
C) Production budget. 
D) Capital expenditure budget 
E) Merchandise purchasing budget. 
A) Sales budget. 
B) Budgeted balance sheet. 
C) Production budget. 
D) Capital expenditure budget 
E) Merchandise purchasing budget.

Question 17

The master budget consists of three major groups of budget components: the operating budgets, the capital expenditures budgets, and the financial budgets.

Accepted Answer

A) True 
 B)False

Question 18

Julia's Candy Co. reports the following information from its sales account and sales budget:
$\begin{array} { l l r } 
\text { Sales } & \text { May } & \$ 105,000 \
& \text { June } & 93,000 \
\text { Expected } & \text { July } & \$ 90,000 \
\text { Sales: } & & \
& \text { August } & 110,000 \
& \text { September } & 120,000
\end{array}$
Cash sales are normally 25% of total sales and all credit sales are expected to be collected in the month following the date of sale. 
-Based on the information from Julia's, the total amount of cash expected to be received from customers in September is:

Accepted Answer

A) $30,000 
B) $82,500 
C) $112,500 
D) $120,000 
E) $202,500 
A) $30,000 
B) $82,500 
C) $112,500 
D) $120,000 
E) $202,500

Question 19

A company's data is presented below.Desired ending inventory is a consistent percentage of the next quarter's sales and the previous year's fourth quarter ending inventory of 560 units meets this requirement.Compute the expected production in the third quarter of the current year. $$\begin{array} { l l l l l } 
\text { Quarter } & 1 & 2 & 3 & 4 \
\text { Expected sales urits } & 7,000 & 5,000 & 8,000 & 6,000 \
\text { Urits produced } & 6,840 & ? & ? & ?
\end{array}$$

Accepted Answer

A) 7,840 
B) 8,160 
C) 8,000 
D) 8,480 
E) 7,360 
A) 7,840 
B) 8,160 
C) 8,000 
D) 8,480 
E) 7,360

Question 20

The purchases budget depends on information provided by the sales budget.

Accepted Answer

A) True 
 B)False

A rolling budget is a specific budget application relevant only to a merchandising company.

A formal statement of future plans, usually expressed in monetary terms, is a:

Assume that total sales for January and February are budgeted to be $50,000 and $100,000, respectively.What are the expected cash receipts for February from current and past sales? Round all calculations to full dollar amounts.

A plan that lists the types and amounts of selling expenses expected during the budget period is called a(n):

What is a merchandise purchases budget? How is the merchandise purchases budget constructed?

The manufacturing budget shows only the direct materials needed for production.

A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit.The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units.Total June sales are anticipated to be:

A budget is a formal statement of future plans, usually expressed in monetary terms.

The overall coordinating activity of the budget process is the responsibility of the:

What is a sales budget? How is the sales budget prepared?

A ________________________ is a continuously revised budget that adds future months or quarters to replace months or quarters that have lapsed.

The financial budgets of a business include the cash budget, the budgeted income statement, and the budgeted balance sheet.

Which of the following is a financial budget?

The master budget consists of three major groups of budget components: the operating budgets, the capital expenditures budgets, and the financial budgets.

The purchases budget depends on information provided by the sales budget.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Time Value of Money

Basic Accounting for Transactions

Accounting for Partnerships

Filters

Exam 7: Master Budgets and Performance Planning

A rolling budget is a specific budget application relevant only to a merchandising company.

A formal statement of future plans, usually expressed in monetary terms, is a:

Assume that total sales for January and February are budgeted to be $50,000 and $100,000, respectively.What are the expected cash receipts for February from current and past sales? Round all calculations to full dollar amounts.

A plan that lists the types and amounts of selling expenses expected during the budget period is called a(n):

What is a merchandise purchases budget? How is the merchandise purchases budget constructed?

The manufacturing budget shows only the direct materials needed for production.

A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit.The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units.Total June sales are anticipated to be:

A budget is a formal statement of future plans, usually expressed in monetary terms.

The overall coordinating activity of the budget process is the responsibility of the:

What is a sales budget? How is the sales budget prepared?

A ________________________ is a continuously revised budget that adds future months or quarters to replace months or quarters that have lapsed.

The financial budgets of a business include the cash budget, the budgeted income statement, and the budgeted balance sheet.

Which of the following is a financial budget?

The master budget consists of three major groups of budget components: the operating budgets, the capital expenditures budgets, and the financial budgets.

The purchases budget depends on information provided by the sales budget.

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Time Value of Money

Basic Accounting for Transactions

Accounting for Partnerships

Filters