Question 1

________ models are mathematical models that can react to any set of assumptions about sales,costs and product mix.

Accepted Answer

A)  Strategic 
B)  Long-range 
C)  Financial planning 
D)  Operating budget 
A)  Strategic 
B)  Long-range 
C)  Financial planning 
D)  Operating budget

Question 2

Which of the following budget(s)has(have)the disbursement for a planned purchase of equipment?

Accepted Answer

A)  operating expense budget 
B)  purchases and cost of goods sold budget 
C)  cash budget only 
D)  cash budget and capital budget 
A)  operating expense budget 
B)  purchases and cost of goods sold budget 
C)  cash budget only 
D)  cash budget and capital budget

Question 3

Venus Company has the following information:
$\begin{array}{ll}\text { Month }&\text { Budgeted Sales }\
\text { January } & \$ 90,000 \
\text { February } & 85,000 \
\text { March } & 92,000 \
\text { April } & 79,000
\end{array}$
Budgeted Operating Expenses Per Month
$\begin{array}{ll}
\text { Wages } & \$ 15,000 \
\text { Advertising } & 12,000 \
\text { Depreciation } & 3,000 \
\text { Sales Commission } & 4 \% \text { of sales }
\end{array}$
All cash expenses are paid as incurred.What are the total cash disbursements budgeted for operating expenses for the month of January?

Accepted Answer

A)  $28,200 
B)  $30,000 
C)  $30,600 
D)  $33,600 
A)  $28,200 
B)  $30,000 
C)  $30,600 
D)  $33,600

Question 4

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 5

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 6

The Wehr Company is preparing a budgeted income statement.The dollar amount of Wages Expense put on the income statement can be found on the ________.

Accepted Answer

A)  purchases budget 
B)  sales budget 
C)  schedule of cash disbursements for purchases 
D)  operating expense budget 
A)  purchases budget 
B)  sales budget 
C)  schedule of cash disbursements for purchases 
D)  operating expense budget

Question 7

On a cash budget,if available cash balance plus net cash receipts and disbursements is negative,________.

Accepted Answer

A)  repayment of loan is suggested 
B)  repayment of loan is required 
C)  borrowing is necessary 
D)  borrowing is not necessary 
A)  repayment of loan is suggested 
B)  repayment of loan is required 
C)  borrowing is necessary 
D)  borrowing is not necessary

Question 8

Corbin Company has prepared the following sales budget:
$\begin{array}{lll}\text { Month }&\text { Cash Sales }&\text { Credit Sales }\
\text { September } & \$ 99,000 & \$ 250,000 \
\text { October } & 225,000 & 180,000 \
\text { November } & 310,000 & 210,000 \
\text { December } & 94,000 & 170,000
\end{array}$
Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What is the expected balance in Accounts Receivable at November 30?

Accepted Answer

A)  $77,500 
B)  $105,000 
C)  $123,000 
D)  $210,000 
A)  $77,500 
B)  $105,000 
C)  $123,000 
D)  $210,000

Question 9

Which of the following budgets identifies the overall goals and objectives of the organization?

Accepted Answer

A)  capital budget 
B)  cash budget 
C)  master budget 
D)  strategic plan 
A)  capital budget 
B)  cash budget 
C)  master budget 
D)  strategic plan

Question 10

Bush Company expects May sales to be $20,000.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)  $6,000 
C)  $8,000 
D)  $14,000 
A)  $4,000 
B)  $6,000 
C)  $8,000 
D)  $14,000

Question 11

Budgeted performance goals generally provide a better basis for evaluating actual performance than past performance.

Accepted Answer

A) True 
 B)False

Question 12

Christian Company has the following information:
$\begin{array}{ll}\text { Month }&\text { Budgeted Purchases }\
\text { January } & \$ 26,800 \
\text { February } & 29,000 \
\text { March } & 30,520 \
\text { April } & 29,480 \
\text { May } & 27,680
\end{array}$
Purchases are paid as follows:
10% in the month of purchase
50% one month after purchase
40% two months after purchase
What is the expected balance in Accounts Payable at March 31?

Accepted Answer

A)  $2,900 
B)  $18,312 
C)  $30,520 
D)  $39,068 
A)  $2,900 
B)  $18,312 
C)  $30,520 
D)  $39,068

Question 13

The schedule of cash disbursements for purchases uses the ________.

Accepted Answer

A)  sales budget 
B)  operating expense budget 
C)  schedule of cash disbursements for operating expenses 
D)  purchases and cost of goods sold budget 
A)  sales budget 
B)  operating expense budget 
C)  schedule of cash disbursements for operating expenses 
D)  purchases and cost of goods sold budget

Question 14

John Company has the following sales budget:
$\begin{array}{lll}\text { Month }&\text { Cash Sales }&\text { Credit Sales }\
\text { September } & \$ 100,000 & \$ 200,000 \
\text { October } & 125,000 & 180,000 \
\text { November } & 130,000 & 210,000 \
\text { December } & 135,000 & 190,000
\end{array}$
Collections of credit sales are 50% in the month of sale,40% in the month following sale,and 10% two months following sale.No uncollectible accounts are expected.What is the expected balance in Accounts Receivable at December 31?

Accepted Answer

A)  $95,000 
B)  $116,000 
C)  $190,000 
D)  $210,000 
A)  $95,000 
B)  $116,000 
C)  $190,000 
D)  $210,000

Question 15

An effective budget process communicates from the top down,but not from the bottom up.

Accepted Answer

A) True 
 B)False

Question 16

Mary Company has the following information:
$\begin{array}{ll}\text { Month }&\text { Budgeted Purchases }\
\text { January } & \$ 26,800 \
\text { February } & 29,000 \
\text { March } & 30,520 \
\text { April } & 29,480 \
\text { May } & 27,680
\end{array}$
Purchases are paid as follows:
10% in the month of purchase
50% one month after purchase
40% two months after purchase

Accepted Answer

A)  $14,740 
B)  $17,508 
C)  $26,948 
D)  $29,716 
A)  $14,740 
B)  $17,508 
C)  $26,948 
D)  $29,716

Question 17

Segal Company has the following data:
$\begin{array}{ll}\text { Month }&\text { Budgeted Sales }\
\text { May } & \$ 46,000 \
\text { June } & 50,000 \
\text { July } & 52,000 \
\text { August } & 49,000
\end{array}$
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)  $9,800 
D)  $10,400 
A)  $4,200 
B)  $8,450 
C)  $9,800 
D)  $10,400

Question 18

Marvin Company has the following sales budget:
 $\begin{array}{lll}\text { Month }&\text { Cash Sales }&\text { Credit Sales }\
\text { February } & \$ 14,000 & \$ 30,000 \
\text { March } & 12,800 & 32,000 \
\text { April } & 10,800 & 28,000
\end{array}$ 
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 Marvin Company has the following sales budget:
...

Question 19

When preparing a budgeted balance sheet,the balance in the equipment account is derived from information in the ________.

Accepted Answer

A)  operating expense budget 
B)  capital budget 
C)  purchases and cost of goods sold budget 
D)  schedule of cash disbursements for operating expenses 
A)  operating expense budget 
B)  capital budget 
C)  purchases and cost of goods sold budget 
D)  schedule of cash disbursements for operating expenses

Question 20

________ usually prepare and use the operating budget.________ focus on the financial budget.

Accepted Answer

A)  Sales managers; the board of directors 
B)  Controllers and treasurers; line operating managers 
C)  Line operating managers; controllers and treasurers 
D)  The audit committee; the board of directors 
A)  Sales managers; the board of directors 
B)  Controllers and treasurers; line operating managers 
C)  Line operating managers; controllers and treasurers 
D)  The audit committee; the board of directors

________ models are mathematical models that can react to any set of assumptions about sales,costs and product mix.

Which of the following budget(s)has(have)the disbursement for a planned purchase of equipment?

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

The activity-based budgeting system emphasizes ________.

The Wehr Company is preparing a budgeted income statement.The dollar amount of Wages Expense put on the income statement can be found on the ________.

On a cash budget,if available cash balance plus net cash receipts and disbursements is negative,________.

Which of the following budgets identifies the overall goals and objectives of the organization?

Budgeted performance goals generally provide a better basis for evaluating actual performance than past performance.

The schedule of cash disbursements for purchases uses the ________.

An effective budget process communicates from the top down,but not from the bottom up.

Mary Company has the following information: Month Budgeted Purchases January \ 26,800 February 29,000 March 30,520 April 29,480 May 27,680 Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase

Segal Company has the following data: Month Budgeted Sales May \ 46,000 June 50,000 July 52,000 August 49,000 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?

When preparing a budgeted balance sheet,the balance in the equipment account is derived from information in the ________.

usually prepare and use the operating budget. focus on the financial budget.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

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

________ models are mathematical models that can react to any set of assumptions about sales,costs and product mix.

Which of the following budget(s)has(have)the disbursement for a planned purchase of equipment?

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

The activity-based budgeting system emphasizes ________.

The Wehr Company is preparing a budgeted income statement.The dollar amount of Wages Expense put on the income statement can be found on the ________.

On a cash budget,if available cash balance plus net cash receipts and disbursements is negative,________.

Which of the following budgets identifies the overall goals and objectives of the organization?

Budgeted performance goals generally provide a better basis for evaluating actual performance than past performance.

The schedule of cash disbursements for purchases uses the ________.

An effective budget process communicates from the top down,but not from the bottom up.

Mary Company has the following information: Month Budgeted Purchases January \ 26,800 February 29,000 March 30,520 April 29,480 May 27,680 Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase

Segal Company has the following data: Month Budgeted Sales May \ 46,000 June 50,000 July 52,000 August 49,000 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?

When preparing a budgeted balance sheet,the balance in the equipment account is derived from information in the ________.

________ usually prepare and use the operating budget.________ focus on the financial budget.

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

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

usually prepare and use the operating budget. focus on the financial budget.