Question 1

For a budget to be most effective it is best approached from a:

Accepted Answer

A) top down approach 
B) bottom up approach 
C) middle management approach 
D) democratic approach 
A) top down approach 
B) bottom up approach 
C) middle management approach 
D) democratic approach B

Question 2

It would be unreasonable to hold a manager responsible for items beyond his/her control therefore only c___________________ costs should be included in the budgeted performance report.

Accepted Answer

controllable

Question 3

Betsy Manufacturing is preparing its purchases budget for the 2nd quarter of the year.The following information is given in units: $$\begin{array} { l c c } 
& \text { Beginning } & \text { Ending } \
& \text { Inventory } & \text { Inventory } \
\text { Balance 2nd quarter } & 100 & 250
\end{array}$$ Sales forecast for 2nd quarter = 1000
How many units should be purchased in the 2nd quarter?

Accepted Answer

A) 900 
B) 1000 
C) 1150 
D) 1250 
A) 900 
B) 1000 
C) 1150 
D) 1250 C

Question 4

The master budget consists of two major parts,the o_______________ budget and the financial budget.

Accepted Answer

The answer of The master budget consists of two major...

Question 5

It is true in relation to cash budgets that:

Accepted Answer

A) They are prepared by entities that sell entirely on credit 
B) They include depreciation 
C) They are based on preparing a projected bank reconciliation 
D) They are the last budget to be prepared 
A) They are prepared by entities that sell entirely on credit 
B) They include depreciation 
C) They are based on preparing a projected bank reconciliation 
D) They are the last budget to be prepared

Question 6

Which statement is true?

Accepted Answer

A) Most firms prepare cash budgets for periods of 5 years or more 
B) The bank figure in the budgeted balance sheet comes from the cash budget 
C) Budgeted retained profits is calculated as opening balance less budgeted profits plus budgeted dividends 
D) GST can be ignored when preparing budgets 
A) Most firms prepare cash budgets for periods of 5 years or more 
B) The bank figure in the budgeted balance sheet comes from the cash budget 
C) Budgeted retained profits is calculated as opening balance less budgeted profits plus budgeted dividends 
D) GST can be ignored when preparing budgets

Question 7

The statement relating to a master budget that is not true is:

Accepted Answer

A) Budget targets are fixed and not subject to revision 
B) It is a set of interrelated budgets 
C) It is normally overseen by a budget committee 
D) It is typically prepared for a one-year period that coincides with the entity's financial year 
A) Budget targets are fixed and not subject to revision 
B) It is a set of interrelated budgets 
C) It is normally overseen by a budget committee 
D) It is typically prepared for a one-year period that coincides with the entity's financial year

Question 8

Having the budget imposed by senior management is known as _____ down budgeting.

Accepted Answer

The answer of Having the budget imposed by senior management...

Question 9

The c___________ expenditure budget shows the planned acquisition of facilities and equipment for the period.

Accepted Answer

The answer of The c___________ expenditure budget shows the planned...

Question 10

The statement concerning responsibility accounting that is untrue is:

Accepted Answer

A) For successful budgeting responsibility must be clearly defined 
B) A manager is held responsible for the activities of his/her department 
C) The choice of responsibility centres in an organisation depends on its characteristics 
D) Responsibility centres are usually determined by differences in the product the firm produces 
A) For successful budgeting responsibility must be clearly defined 
B) A manager is held responsible for the activities of his/her department 
C) The choice of responsibility centres in an organisation depends on its characteristics 
D) Responsibility centres are usually determined by differences in the product the firm produces

Question 11

The c__________ b__________ shows projected cash receipts and projected cash payments during the period.

Accepted Answer

The answer of The c__________ b__________ shows projected cash receipts...

Question 12

How many of these are the benefits of budgeting?
?	ensures future events will never catch management by surprise
?	establishes organisational goals 
?	is a means of coordination
?	forces planning to take place

Accepted Answer

A) One 
B) Two 
C) Three 
D) Four 
A) One 
B) Two 
C) Three 
D) Four

Question 13

Budget p________________ reports compare actual and budget performance to determine favourable or unfavourable variances.

Accepted Answer

The answer of Budget p________________ reports compare actual and budget...

Question 14

Which of the following budgets is prepared after the cash budget?

Accepted Answer

A) Capital expenditure budget 
B) Budgeted balance sheet 
C) Manufacturing overhead budget 
D) Production budget 
A) Capital expenditure budget 
B) Budgeted balance sheet 
C) Manufacturing overhead budget 
D) Production budget

Question 15

The method which would not be used to forecast sales is:

Accepted Answer

A) Extrapolation of past sales 
B) Predictions by senior management 
C) Statistical or mathematical techniques 
D) Working out the maximum production that can be achieved 
A) Extrapolation of past sales 
B) Predictions by senior management 
C) Statistical or mathematical techniques 
D) Working out the maximum production that can be achieved

Question 16

The first and last steps respectively in the developing a master budget are:

Accepted Answer

A) Forecasting sales; estimating expenses 
B) Preparation of the sales budget; preparation of the capital expenditure budget 
C) Identifying goals; preparation of a set of budgeted financial statements 
D) Identifying goals; preparation of the cash budget 
A) Forecasting sales; estimating expenses 
B) Preparation of the sales budget; preparation of the capital expenditure budget 
C) Identifying goals; preparation of a set of budgeted financial statements 
D) Identifying goals; preparation of the cash budget

Question 17

Large favourable variances between actual and planned performance may indicate:

Accepted Answer

A) Budget income targets may need to be revised upwards in the future 
B) That the firm must be operating efficiently 
C) That actual expenses were higher than budgeted expenses 
D) That actual income was too high and should be revised downwards in the future 
A) Budget income targets may need to be revised upwards in the future 
B) That the firm must be operating efficiently 
C) That actual expenses were higher than budgeted expenses 
D) That actual income was too high and should be revised downwards in the future

Question 18

The statement that is not true is:

Accepted Answer

A) Preparing operating budgets for service businesses is normally simpler than preparing them for retailers or manufacturers 
B) A service business does not need to prepare a cash budget 
C) GST estimates need to be included in a cash budget 
D) The emphasis in budgeting for not-for profit organisations tends to be on cash flows and the final cash position rather than on profits,income and expenditure 
A) Preparing operating budgets for service businesses is normally simpler than preparing them for retailers or manufacturers 
B) A service business does not need to prepare a cash budget 
C) GST estimates need to be included in a cash budget 
D) The emphasis in budgeting for not-for profit organisations tends to be on cash flows and the final cash position rather than on profits,income and expenditure

Question 19

Purchases of buildings and equipment are formally planned in the:

Accepted Answer

A) Selling and administrative expense budget 
B) Budgeted balance sheet 
C) Depreciation budget 
D) Capital expenditure budget 
A) Selling and administrative expense budget 
B) Budgeted balance sheet 
C) Depreciation budget 
D) Capital expenditure budget

Question 20

Information for Rambo Corporation's cash budget is: $$\begin{array} { l r c c c } 
\text { Quarter } & 1 & 2 & 3 & 4 \
\text { Estimated Sales (units) } & 100 & 200 & 300 & 200
\end{array}$$ Each unit sells for $12 and 80% of sales are on credit.Credit sales are collected as follows: 25% in the quarter of the sale and the balance in the following quarter.How many dollars of 3rd quarter sales will be collected in cash in the 4th quarter?

Accepted Answer

A) $225 
B) $2,160 
C) $180 
D) $2,700 
A) $225 
B) $2,160 
C) $180 
D) $2,700

Exam 12: Budgeting for Planning and Control

For a budget to be most effective it is best approached from a:

It would be unreasonable to hold a manager responsible for items beyond his/her control therefore only c___________________ costs should be included in the budgeted performance report.

Betsy Manufacturing is preparing its purchases budget for the 2nd quarter of the year.The following information is given in units: Beginning Ending Inventory Inventory Balance 2nd quarter 100 250 Sales forecast for 2nd quarter = 1000 How many units should be purchased in the 2nd quarter?

The master budget consists of two major parts,the o_______________ budget and the financial budget.

It is true in relation to cash budgets that:

Which statement is true?

The statement relating to a master budget that is not true is:

Having the budget imposed by senior management is known as _____ down budgeting.

The c___________ expenditure budget shows the planned acquisition of facilities and equipment for the period.

The statement concerning responsibility accounting that is untrue is:

The c__________ b__________ shows projected cash receipts and projected cash payments during the period.

How many of these are the benefits of budgeting? ? ensures future events will never catch management by surprise ? establishes organisational goals ? is a means of coordination ? forces planning to take place

Budget p________________ reports compare actual and budget performance to determine favourable or unfavourable variances.

Which of the following budgets is prepared after the cash budget?

The method which would not be used to forecast sales is:

The first and last steps respectively in the developing a master budget are:

Large favourable variances between actual and planned performance may indicate:

The statement that is not true is:

Purchases of buildings and equipment are formally planned in the:

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Internal Control

Cost-Volume-Profit Analysis for Decision Making

Performance Evaluation for Managers

Differential Analysis,profitability Analysis and Capital Budgeting

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Liabilities

Analysis and Interpretation of Financial Statements

Filters

The c b shows projected cash receipts and projected cash payments during the period.