Question 1

One of the major benefits of formal budgeting is the positive effect it can have on employee attitudes.

Accepted Answer

A) True 
 B)False

Question 2

What is a capital expenditures budget?

Accepted Answer

The capital expenditures budge

Question 3

A plan that lists the types and amounts of general and administrative expenses expected during the budget period is referred to as a:

Accepted Answer

A)  General and administrative expense budget. 
B)  Sales budget. 
C)  Cash payments budget. 
D)  Overhead budget. 
E)  Selling expense budget. 
A)  General and administrative expense budget. 
B)  Sales budget. 
C)  Cash payments budget. 
D)  Overhead budget. 
E)  Selling expense budget.

Question 4

Del Carpio, Inc. sells two products, Widgets and Gadgets. The sales forecast in units for the first quarter of the coming year is:  
Cash sales are 30% of each product's monthly sales. The remaining sales are credit sales which 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 dollars per

Question 5

The process of planning future business actions and expressing them as a formal plan is called:

Accepted Answer

A)  Budgeting. 
B)  Cost accounting. 
C)  Managerial accounting. 
D)  Variance analysis. 
E)  Standard cost analysis. 
A)  Budgeting. 
B)  Cost accounting. 
C)  Managerial accounting. 
D)  Variance analysis. 
E)  Standard cost analysis.

Question 6

___________________________ 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 7

The budget process is a continuous activity of planning, revising, and evaluating business activities.

Accepted Answer

A) True 
 B)False

Question 8

A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:

Accepted Answer

A)  Selling expenses budget. 
B)  Merchandise purchases budget. 
C)  Sales budget. 
D)  Cash budget. 
E)  Capital expenditures budget. 
A)  Selling expenses budget. 
B)  Merchandise purchases budget. 
C)  Sales budget. 
D)  Cash budget. 
E)  Capital expenditures budget.

Question 9

Which of the following budgets is not an operating budget?

Accepted Answer

A)  Sales budget. 
B)  Cash budget. 
C)  General and administrative expense budget. 
D)  Selling expenses budget. 
E)  Merchandise purchases. 
A)  Sales budget. 
B)  Cash budget. 
C)  General and administrative expense budget. 
D)  Selling expenses budget. 
E)  Merchandise purchases.

Question 10

Past performance is the best overall basis for evaluating current performance and assessing the need for corrective action.

Accepted Answer

A) True 
 B)False

Question 11

A sporting goods store purchased $7,000 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 12

Blaircraft Company manufactures a product which requires five pounds of raw material for each unit produced. For the next year, beginning inventory of raw materials is 8,000 pounds. The raw materials inventory at the end of each quarter should be 15% of the next quarter's raw materials needed for production. Given the projected production in units below, what is the quantity of raw materials which need to be purchased for the third quarter?
$$\begin{array} { l l l l l } 
\text { Quarter } & 1 & 2 & 3 & 4 \
\text { Expected Production Units } & 7,000 & 5,000 & 8,000 & 6,000
\end{array}$$

Accepted Answer

A)  41,500 pounds. 
B)  40,000 pounds. 
C)  38,500 pounds. 
D)  7,7000 pounds. 
E)  8,300 pounds. 
A)  41,500 pounds. 
B)  40,000 pounds. 
C)  38,500 pounds. 
D)  7,7000 pounds. 
E)  8,300 pounds.

Question 13

Harold's expects its September sales to be 20% higher than its August sales of $150,000. Purchases were $100,000 in August and are expected to be $120,000 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 $7,500. The ending cash balance on September 30 would be:

Accepted Answer

A)  $31,500 
B)  $67,500 
C)  $54,000 
D)  $61,500 
E)  $136,500 
A)  $31,500 
B)  $67,500 
C)  $54,000 
D)  $61,500 
E)  $136,500

Question 14

Kabuki Company's policy is to have 16% of the next month's sales as desired ending inventory. Estimated sales are shown in the table below. Given this data, what is Kabuki's estimated purchases for March?

Accepted Answer

A)  9,400 
B)  9,320 
C)  8,900 
D)  8,644 
E)  8,820 
A)  9,400 
B)  9,320 
C)  8,900 
D)  8,644 
E)  8,820

Question 15

Budgeting is an informal plan for future business activities.

Accepted Answer

A) True 
 B)False

Question 16

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 17

A department store has budgeted sales of 12,000 men's suits in September. Management wants to have 6,000 suits in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 4,000 suits. What is the dollar amount of purchase of suits? Each suit has a cost of $75.

Accepted Answer

A)  $750,000 
B)  $900,000 
C)  $1,050,000 
D)  $1,200,000 
E)  $1,350,000 
A)  $750,000 
B)  $900,000 
C)  $1,050,000 
D)  $1,200,000 
E)  $1,350,000

Question 18

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 19

Financial budgets are normally completed after preparation of operating and capital expenditure budgets.

Accepted Answer

A) True 
 B)False

Question 20

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...

Exam 20: Master Budgets and Performance Planning

One of the major benefits of formal budgeting is the positive effect it can have on employee attitudes.

What is a capital expenditures budget?

A plan that lists the types and amounts of general and administrative expenses expected during the budget period is referred to as a:

The process of planning future business actions and expressing them as a formal plan is called:

___________________________ 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 a continuous activity of planning, revising, and evaluating business activities.

A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:

Which of the following budgets is not an operating budget?

Past performance is the best overall basis for evaluating current performance and assessing the need for corrective action.

Kabuki Company's policy is to have 16% of the next month's sales as desired ending inventory. Estimated sales are shown in the table below. Given this data, what is Kabuki's estimated purchases for March?

Budgeting is an informal plan for future business activities.

Which of the following is a financial budget?

Financial budgets are normally completed after preparation of operating and capital expenditure budgets.

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

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 and Analyzing Cash Flows

Analyzing Financial Statements

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

Decentralization and Performance Evaluation

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Investments and International Operations

Accounting for Partnerships

Appendix : Accounting With Special Journals

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