Question 1

A managerial accounting report that presents predicted amounts of the company's revenues and expenses for the budget period is called a:

Accepted Answer

A)  Budgeted income statement. 
B)  Budgeted balance sheet. 
C)  Master plan. 
D)  Rolling income statement. 
E)  Continuous income statement. 
A)  Budgeted income statement. 
B)  Budgeted balance sheet. 
C)  Master plan. 
D)  Rolling income statement. 
E)  Continuous income statement.

Question 2

Why is the sales budget usually prepared first?

Accepted Answer

The sales budget is normally prepared fi

Question 3

A sporting goods store purchased $7,000 worth of ski boots in October.The store had $3,000 of ski boots in inventory at the beginning of October and expects to have $2,000 of ski boots in inventory at the end of October to cover part of anticipated November sales.What is the budgeted cost of goods sold for October?

Accepted Answer

A)  $5,000 
B)  $7,000 
C)  $8,000 
D)  $9,000 
E)  $10,000 
A)  $5,000 
B)  $7,000 
C)  $8,000 
D)  $9,000 
E)  $10,000

Question 4

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 5

Effective budgeting requires all of the following except:

Accepted Answer

A)  Attainable goals. 
B)  Determination of budgets by top levels of management. 
C)  Evaluation processes that provide opportunities to explain any failures. 
D)  Clear communication of all budgets. 
E)  Adequate supporting documentation for the budget. 
A)  Attainable goals. 
B)  Determination of budgets by top levels of management. 
C)  Evaluation processes that provide opportunities to explain any failures. 
D)  Clear communication of all budgets. 
E)  Adequate supporting documentation for the budget.

Question 6

The master budget includes:

Accepted Answer

A)  Only operating budgets and financial budgets. 
B)  Only a capital expenditures budget and a cash budget. 
C)  Only a budgeted income statement and a budgeted balance sheet. 
D)  Only a cash budget and operating budgets. 
E)  Operating budgets, a capital expenditure budget, and financial budgets. 
A)  Only operating budgets and financial budgets. 
B)  Only a capital expenditures budget and a cash budget. 
C)  Only a budgeted income statement and a budgeted balance sheet. 
D)  Only a cash budget and operating budgets. 
E)  Operating budgets, a capital expenditure budget, and financial budgets.

Question 7

The merchandise purchases budget is the starting point for preparing the master budget.

Accepted Answer

A) True 
 B)False

Question 8

Nano,Inc.is preparing its budget for the second quarter.The following sales data have been forecasted:
 $\begin{array}{llr}
&\text { April}&\text { May}&\text { June}&\text { July }&\text {August }\
\text { Total sales } & 640 & 720 & 780 & 620 & 660 
\end{array}$
 
Additional information follows:
 $\begin{array}{ll}
\text { Inventory on March } 31: & 192 \text { units } \
\text { Desired ending inventory each month: } & 30 \% \text { of next month's sales }
\end{array}$
 
How many units should be purchased in April,May,and June? How many units should be purchased in the second quarter in total?

Accepted Answer

* 30% of n

Question 9

Use the following data to determine the company's cash disbursements for the month of August and September:

Accepted Answer

None

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A comprehensive or overall formal plan for a business that includes specific plans for expected sales,the units of product to be produced,the merchandise or materials to be purchased,the expense to be incurred,the long-term assets to be purchased,and the amounts of cash to be borrowed or loans to be repaid,as well as a budgeted income statement and balance sheet,is called a:

Accepted Answer

A)  Master budget. 
B)  Cash budget. 
C)  Capital expenditures budget. 
D)  Rolling budget. 
E)  Production budget. 
A)  Master budget. 
B)  Cash budget. 
C)  Capital expenditures budget. 
D)  Rolling budget. 
E)  Production budget.

Question 12

A budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities is:

Accepted Answer

A)  Traditional budgeting. 
B)  Management budgeting. 
C)  Master budgeting. 
D)  Activity-based budgeting. 
E)  Cash budgeting. 
A)  Traditional budgeting. 
B)  Management budgeting. 
C)  Master budgeting. 
D)  Activity-based budgeting. 
E)  Cash budgeting.

Question 13

___________________________ is a budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities.

Accepted Answer

Activity-b

Question 14

A sporting goods store budgeted August purchases of ski jackets at $140,000.The store had ski jackets costing $12,000 in its inventory at the beginning of August; and to cover part of anticipated September sales,they expect to have $25,000 of ski jackets in inventory at the end of the month of August.What is the budgeted cost of goods sold for August?

Accepted Answer

\[\begin{array} { l r } 
\text { Beginni

Question 15

The budget process is usually administered by a _____________________.

Accepted Answer

The answer of The budget process is usually administered by...

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

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

A Company forecasts sales of $91,500 for the quarter ended December 31.Its gross profit rate is 18% of sales,and its September 30 inventory is $25,000.If the December 31 inventory is targeted at $7,500,budgeted purchases for the fourth quarter should be:

Accepted Answer

A)  $57,530 
B)  $107,530 
C)  $0 
D)  $82,530 
E)  $91,000 
A)  $57,530 
B)  $107,530 
C)  $0 
D)  $82,530 
E)  $91,000

Question 19

The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed,adding a new budget each period so that the budgets always cover the same number of future periods,is called:

Accepted Answer

A)  Participatory budgeting 
B)  Capital budgeting 
C)  Balanced budgeting 
D)  Continuous budgeting 
E)  Primary budgeting 
A)  Participatory budgeting 
B)  Capital budgeting 
C)  Balanced budgeting 
D)  Continuous budgeting 
E)  Primary budgeting

Question 20

Merchandising companies prepare the production budget after preparing the sales budget.

Accepted Answer

A) True 
 B)False

Exam 20: Master Budgets and Performance Planning

A managerial accounting report that presents predicted amounts of the company's revenues and expenses for the budget period is called a:

Why is the sales budget usually prepared first?

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

Effective budgeting requires all of the following except:

The master budget includes:

The merchandise purchases budget is the starting point for preparing the master budget.

Use the following data to determine the company's cash disbursements for the month of August and September:

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

A budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities is:

___________________________ is a budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities.

The budget process is usually administered by a _____________________.

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

A Company forecasts sales of $91,500 for the quarter ended December 31.Its gross profit rate is 18% of sales,and its September 30 inventory is $25,000.If the December 31 inventory is targeted at $7,500,budgeted purchases for the fourth quarter should be:

The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed,adding a new budget each period so that the budgets always cover the same number of future periods,is called:

Merchandising companies prepare the production budget after preparing the sales budget.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Time Value of Money

Investments and International Operations

Accounting for Partnerships

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