Question 1

Briefly describe the process by which budgets are developed and administered.

Accepted Answer

Budgets are developed in a bottom-up pro

Question 2

Long-term liability data for the budgeted balance sheet is derived from:

Accepted Answer

A) The cash budget and capital expenditures budget. 
B) The cash budget and sales budget. 
C) The cash budget and budgeted income statement. 
D) The sales budget and production budget. 
E) The asset budget and debt budget. 
A) The cash budget and capital expenditures budget. 
B) The cash budget and sales budget. 
C) The cash budget and budgeted income statement. 
D) The sales budget and production budget. 
E) The asset budget and debt budget.

Question 3

Del Carpio, Inc.sells two products, Widgets and Gadgets.The sales forecast in units for the first quarter of the coming year is:
$$\begin{array} { l l l } 
& \underline{\text { Widgets }} & \underline{\text { Gadgets }} \
\text { Jaruary } & 20,000 & 36,000 \
 \text { February }  & 28,000 & 60,000 \
\text { March }& 36,000 & 64,000
\end{array}$$ 
Cash sales are 30% of each product's monthly sales.The remaining sales are credit sales that are collected as follows: 70% in the month of sale, 20% the next month, and 10% in the following month.Unit sale prices are $30 and $20 for Widgets and Gadgets, respectively.
Determine the company's cash receipts for March from its current and past sales.

Accepted Answer

Sales in d

Question 4

Activity-based budgeting is a budget system based on expected activities and their activity levels, which helps management plan for the resources required.

Accepted Answer

A) True 
 B)False

Question 5

The most useful budget figures are developed:

Accepted Answer

A) From the top down. 
B) From the bottom up following a participatory process. 
C) Solely by the budget committee. 
D) By the CEO. 
E) After the accounting period has begun. 
A) From the top down. 
B) From the bottom up following a participatory process. 
C) Solely by the budget committee. 
D) By the CEO. 
E) After the accounting period has begun.

Question 6

The set of periodic budgets that are prepared and periodically revised in the practice of continuous budgeting is called:

Accepted Answer

A) Production budgets 
B) Sales budgets 
C) Cash budgets 
D) Rolling budgets 
E) Capital expenditures budgets 
A) Production budgets 
B) Sales budgets 
C) Cash budgets 
D) Rolling budgets 
E) Capital expenditures budgets

Question 7

A department store has budgeted cost of goods sold for August of $60,000 for its women's coats.Management wants to have $12,000 of coats in inventory at the end of the month to prepare for the winter season.Beginning inventory in August was $8,000.What dollar amount of coats should be purchased to meet the above plans?

Accepted Answer

None

Question 8

What is a cash budget? How can management use a cash budget?

Accepted Answer

A cash budget shows expected cash inflow

Question 9

To determine the production budget for an accounting period, consideration is not given to which of the following:

Accepted Answer

A) Budgeted ending inventory. 
B) Budgeted beginning inventory. 
C) Budgeted sales. 
D) Budgeted overhead. 
E) Required units of inventory available. 
A) Budgeted ending inventory. 
B) Budgeted beginning inventory. 
C) Budgeted sales. 
D) Budgeted overhead. 
E) Required units of inventory available.

Question 10

Which of the following is not a benefit of following a well-designed budgeting process?

Accepted Answer

A) Improved decision-making processes. 
B) Improved performance evaluations. 
C) Improved coordination of business activities. 
D) Assurance of future profits. 
E) Improved commitment to meet expected performance by those affected. 
A) Improved decision-making processes. 
B) Improved performance evaluations. 
C) Improved coordination of business activities. 
D) Assurance of future profits. 
E) Improved commitment to meet expected performance by those affected.

Question 11

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

Accepted Answer

A) True 
 B)False

Question 12

There are at least five benefits from budgeting.Identify two of these benefits:
(1)_______________________________________
(2)_______________________________________

Accepted Answer

(Any two of the following five

Question 13

A company's gross profit rate is 30% of sales.Expected January sales are $78,000 and desired January 31st inventory is $7,500.Assuming the December 31st inventory is $6,200 what amount of purchases should this company budget for the month of January?

Accepted Answer

A) $53,300 
B) $55,900 
C) $24,700 
D) $22,100 
E) $79,300 
A) $53,300 
B) $55,900 
C) $24,700 
D) $22,100 
E) $79,300

Question 14

In preparing financial budgets:

Accepted Answer

A) The budgeted balance sheet is usually prepared last. 
B) The cash budget is usually not prepared. 
C) The budgeted income statement is usually not prepared. 
D) The capital expenditures budget is usually prepared last. 
E) The merchandise purchases budget is key. 
A) The budgeted balance sheet is usually prepared last. 
B) The cash budget is usually not prepared. 
C) The budgeted income statement is usually not prepared. 
D) The capital expenditures budget is usually prepared last. 
E) The merchandise purchases budget is key.

Question 15

Sweeny Co.is preparing a cash budget for the second quarter of the coming year.The following data have been forecasted:
$\begin{array}{lrr}
& \underline {\text { April  }  }& \underline {\text { May } }\
\text { Sales } & \$ 150,000 & \$ 157,500 \
\text { Merchandise purchases } & 107,000 & 112,400 \
\text { Operating expenses: } &  \
\text { Payroll } & 13,600 & 14,280 \
\text { Advertising } & 5,400 & 5,700 \
\text { Rent } & 1,500 & 1,500 \
\text { Depreciation } & 7,500 & 7,500\
\text { End of April balances: }\
\text { Cash } & 40,000 \
\text { Bank loan payable } & 16,000
\end{array}$Additional data:
(1)Sales are 40% cash and 60% credit.The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter.Total sales in March were $125,000.
(2)Purchases are all on credit, with 40% paid in the month of purchase and the balance paid in the following month.
(3)Operating expenses are paid in the month they are incurred.
(4)A minimum cash balance of $40,000 is required at the end of each month.
(5)Loans are used to maintain the minimum cash balance.At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month.Repayments are made whenever excess cash is available.
Prepare the company's cash budget for May.Show the ending loan balance at May 31.

Accepted Answer

None

Question 16

A Company is preparing a cash budget for June.The company has $67,000 cash at the beginning of June and anticipates $82,330 in cash receipts and $93,520 in cash disbursements during June.This company has an agreement with its bank to maintain a cash balance of at least $65,000.As of May 31, the company owes $25,000 to the bank.To maintain the $65,000 required balance, during June the company must:

Accepted Answer

A) Borrow $9,190 
B) Repay $13,190 
C) Borrow $25,000 
D) Repay $25,000 
E) Repay $9,190 
A) Borrow $9,190 
B) Repay $13,190 
C) Borrow $25,000 
D) Repay $25,000 
E) Repay $9,190

Question 17

Which of the following would not be used in preparing a cash budget for October?

Accepted Answer

A) Beginning cash balance on October 1. 
B) Budgeted sales and collections for October. 
C) Estimated depreciation expense for October. 
D) Budgeted salaries expense for October. 
E) Budgeted capital equipment purchases for October. 
A) Beginning cash balance on October 1. 
B) Budgeted sales and collections for October. 
C) Estimated depreciation expense for October. 
D) Budgeted salaries expense for October. 
E) Budgeted capital equipment purchases for October.

Question 18

Indicate the order in which the following budgets would be completed (1 = first and so on)
______ (A)Merchandise purchases budget
______ (B)Capital expenditures budget
______ (C)Selling expense budget
______ (D)Budgeted balance sheet
______ (E)Cash budget

Accepted Answer

(A)1 (B)3

Question 19

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

Accepted Answer

The master budget is the comprehensive p

Question 20

Match between columns
                        Premises: A plan that shows the expected cash inflows and outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans.
An accounting report that presents predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period.
A plan showing the number of units to be produced each month.
A new set of budgets added to replace the ones that have lapsed as each budget period goes by.
A plan showing the units of goods to be sold and the sales to be derived; usually the starting point in the budgeting process.
A plan that lists the types and amounts of selling expenses expected during the budget period.
A plan that shows the predicted costs for direct materials, direct labor, and overhead costs to be incurred in manufacturing the units in the production budget.
A plan that lists dollar amounts to be both received from disposing of plant assets and spent on purchasing additional plant assets to carry out the budgeted business activities.
A formal statement of future plans, usually expressed in monetary terms.
The practice of preparing budgets for a selected number of several periods and revising those budgets as each period is completed.

Accepted Answer

The Answer of Manufacturing budget and Budgeted balance sheet and is...

Briefly describe the process by which budgets are developed and administered.

Long-term liability data for the budgeted balance sheet is derived from:

Activity-based budgeting is a budget system based on expected activities and their activity levels, which helps management plan for the resources required.

The most useful budget figures are developed:

The set of periodic budgets that are prepared and periodically revised in the practice of continuous budgeting is called:

What is a cash budget? How can management use a cash budget?

To determine the production budget for an accounting period, consideration is not given to which of the following:

Which of the following is not a benefit of following a well-designed budgeting process?

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

There are at least five benefits from budgeting.Identify two of these benefits: (1)_ (2)_

A company's gross profit rate is 30% of sales.Expected January sales are $78,000 and desired January 31^st inventory is $7,500.Assuming the December 31^st inventory is $6,200 what amount of purchases should this company budget for the month of January?

In preparing financial budgets:

Which of the following would not be used in preparing a cash budget for October?

Indicate the order in which the following budgets would be completed (1 = first and so on) (A)Merchandise purchases budget (B)Capital expenditures budget (C)Selling expense budget (D)Budgeted balance sheet __ (E)Cash budget

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

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

Briefly describe the process by which budgets are developed and administered.

Long-term liability data for the budgeted balance sheet is derived from:

Activity-based budgeting is a budget system based on expected activities and their activity levels, which helps management plan for the resources required.

The most useful budget figures are developed:

The set of periodic budgets that are prepared and periodically revised in the practice of continuous budgeting is called:

What is a cash budget? How can management use a cash budget?

To determine the production budget for an accounting period, consideration is not given to which of the following:

Which of the following is not a benefit of following a well-designed budgeting process?

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

There are at least five benefits from budgeting.Identify two of these benefits: (1)_______________________________________ (2)_______________________________________

A company's gross profit rate is 30% of sales.Expected January sales are $78,000 and desired January 31st inventory is $7,500.Assuming the December 31st inventory is $6,200 what amount of purchases should this company budget for the month of January?

In preparing financial budgets:

Which of the following would not be used in preparing a cash budget for October?

Indicate the order in which the following budgets would be completed (1 = first and so on) ______ (A)Merchandise purchases budget ______ (B)Capital expenditures budget ______ (C)Selling expense budget ______ (D)Budgeted balance sheet ______ (E)Cash budget

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

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

There are at least five benefits from budgeting.Identify two of these benefits: (1)_ (2)_

A company's gross profit rate is 30% of sales.Expected January sales are $78,000 and desired January 31^st inventory is $7,500.Assuming the December 31^st inventory is $6,200 what amount of purchases should this company budget for the month of January?

Indicate the order in which the following budgets would be completed (1 = first and so on) (A)Merchandise purchases budget (B)Capital expenditures budget (C)Selling expense budget (D)Budgeted balance sheet __ (E)Cash budget