Exam 7: Introduction to Budgets and Preparing the Master Budget

When preparing the budgeted income statement,which of the following is the source for the amount of sales?

Line operating managers usually prepare and use the operating budget.

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

A budget is an example of an informal business plan.

Paulson Company's expected sales for April are $29,000.Other information follows: Budgeted Operating Expenses Amount Wages \ 4,000 Advertising 1,680 Depreciation 1,440 Rent 2,560 Promotion 5\% of sales What are the total expected operating expenses for April?

Hoover Company expects June sales to be $30,000.Of these sales,credit sales are expected to be $12,000.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 June from June sales.

In a master budget,a capital budget is used to prepare the ________.

What item is NOT a line item on the purchases and cost of goods sold budget?

A major drawback of using historical results for judging current performance is that inefficiencies may be concealed in past performance.

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

A spreadsheet can be used to prepare ________.

Depreciation expense is usually a disbursement listed on the cash budget.

Activity-based budgets are an example of functional budgeting.

A major benefit of effective budgeting is that ________.

Which budget guides day-to-day operations in a business?

Jensen Company is preparing a cash budget for the month of June.The following information is available: Cash Balance, May 31, 2015 \ 10,000 Cash collections from customers in June 76,000 Cash paid for merchandise in June 42,000 Paid operating expenses in June 17,000 Purchase furniture for cash in June 5,000 Depreciation expense in June 2,000 Amortization expense in June 3,000 The minimum cash balance desired is $10,000.What are the net cash receipts and disbursements for the month of June?

Participative budgeting is the active participation of all affected employees in the formulation of the budget.

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

The first step in preparing the master budget is the preparation of the budgeted income statement.

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