Question 1

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 2

Cameroon Corp.manufactures and sells electric staplers for $16 each.If 10,000 units were sold in December,and management forecasts 4% growth in sales each month,the number of electric stapler sales budgeted for March should be:

Accepted Answer

A) 10,000 
B) 11,249 
C) 10,400 
D) 10,816 
E) 11,000 
A) 10,000 
B) 11,249 
C) 10,400 
D) 10,816 
E) 11,000

Question 3

The master budget includes individual budgets for sales,production or purchases,various expenses,capital expenditures,and cash.

Accepted Answer

A) True 
 B)False

Question 4

Budgets are long term financial plans that generally cover more than a one-year period.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following accounts would appear on a budgeted balance sheet?

Accepted Answer

A) Income tax expense. 
B) Accounts receivable. 
C) Sales commissions. 
D) Depreciation expense. 
E) All of the choices are correct. 
A) Income tax expense. 
B) Accounts receivable. 
C) Sales commissions. 
D) Depreciation expense. 
E) All of the choices are correct.

Question 6

A company's history indicates that 20% of its sales are for cash and the rest are on credit.Collections on credit sales are 20% in the month of the sale,50% in the next month,25% the following month,and 5% is uncollectible.Projected sales for December,January,and February are $60,000,$85,000 and $95,000,respectively.The February expected cash receipts from all current and prior credit sales is:

Accepted Answer

A) $57,000 
B) $61,200 
C) $66,400 
D) $80,750 
E) $90,250 
A) $57,000 
B) $61,200 
C) $66,400 
D) $80,750 
E) $90,250

Question 7

Webster Corporation's budgeted sales for February are $325,000.Webster pays sales representatives a commission of 6% of sales dollars.The company pays a sales manager a monthly salary of $4,400 and expects advertising expense of $2,000 per month.Compute the total selling expenses to be reported on the selling expense budget for the month of February.

Accepted Answer

A) $19,500. 
B) $6,400. 
C) $23,900. 
D) $25,900. 
E) $21,500. 
A) $19,500. 
B) $6,400. 
C) $23,900. 
D) $25,900. 
E) $21,500.

Question 8

The sales budget is derived from the production budget.

Accepted Answer

A) True 
 B)False

Question 9

Zhang Industries budgets production of 300 units in June and 310 units in July.Each unit requires 1.5 hours of direct labor.The direct labor rate if $14 per hour.The indirect labor rate is $21.00 per hour.Compute the budgeted direct labor cost for July.

Accepted Answer

A) $6,300. 
B) $6,510. 
C) $9,450. 
D) $9,765. 
E) $16,275. 
A) $6,300. 
B) $6,510. 
C) $9,450. 
D) $9,765. 
E) $16,275.

Question 10

Personnel who will have performance evaluated according to the budget standards should not be consulted and involved in preparing the budget.

Accepted Answer

A) True 
 B)False

Question 11

A budget is best described as:

Accepted Answer

A) A formal statement of a company's future plans usually expressed in monetary terms. 
B) A master control device. 
C) An informal statement of company's future plans usually expressed in monetary terms. 
D) The most crucial component of a company's evaluation process. 
E) The minimum acceptable performance level. 
A) A formal statement of a company's future plans usually expressed in monetary terms. 
B) A master control device. 
C) An informal statement of company's future plans usually expressed in monetary terms. 
D) The most crucial component of a company's evaluation process. 
E) The minimum acceptable performance level.

Question 12

A budget is a formal statement of future plans,usually expressed in monetary terms.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following budgets is not a budget that a manufacturer would include in its master budget?

Accepted Answer

A) Sales budget. 
B) Direct materials budget. 
C) Production budget. 
D) Merchandise purchases budget. 
E) Cash budget. 
A) Sales budget. 
B) Direct materials budget. 
C) Production budget. 
D) Merchandise purchases budget. 
E) Cash budget.

Question 14

The selling expenses budget is normally prepared before the sales budget because selling expenses affect the amount of sales.

Accepted Answer

A) True 
 B)False

Question 15

Budgeting is an informal plan for future business activities.

Accepted Answer

A) True 
 B)False

Question 16

Southland Company is preparing a cash budget for August.The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash disbursements during August.Southland Company wants to maintain a minimum cash balance of $10,000.The preliminary cash balance at the end of August before any loan activity is:

Accepted Answer

A) $13,300. 
B) $137,800. 
C) ($13,700). 
D) $3,300. 
E) $27,000. 
A) $13,300. 
B) $137,800. 
C) ($13,700). 
D) $3,300. 
E) $27,000.

Question 17

In preparing a budget for the last three months of the current year,Country Cozy Company is planning the units of merchandise it must order each month.The company's policy is to have 15% of the next month's sales in its inventory at the end of each month.Projected sales for October,November,and December are 27,000 units,29,500 units,and 31,000 units,respectively.How many units must be ordered in November?

Accepted Answer

The answer of In preparing a budget for the last...

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

Cameroon Corp.manufactures and sells electric staplers for $16 each.If 10,000 units were sold in December,and management forecasts 4% growth in sales each month,the number of electric stapler sales budgeted for March should be:

The master budget includes individual budgets for sales,production or purchases,various expenses,capital expenditures,and cash.

Budgets are long term financial plans that generally cover more than a one-year period.

Which of the following accounts would appear on a budgeted balance sheet?

The sales budget is derived from the production budget.

Zhang Industries budgets production of 300 units in June and 310 units in July.Each unit requires 1.5 hours of direct labor.The direct labor rate if $14 per hour.The indirect labor rate is $21.00 per hour.Compute the budgeted direct labor cost for July.

Personnel who will have performance evaluated according to the budget standards should not be consulted and involved in preparing the budget.

A budget is best described as:

A budget is a formal statement of future plans,usually expressed in monetary terms.

Which of the following budgets is not a budget that a manufacturer would include in its master budget?

The selling expenses budget is normally prepared before the sales budget because selling expenses affect the amount of sales.

Budgeting is an informal plan for future business activities.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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Exam 22: Master Budgets and Planning

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

Cameroon Corp.manufactures and sells electric staplers for $16 each.If 10,000 units were sold in December,and management forecasts 4% growth in sales each month,the number of electric stapler sales budgeted for March should be:

The master budget includes individual budgets for sales,production or purchases,various expenses,capital expenditures,and cash.

Budgets are long term financial plans that generally cover more than a one-year period.

Which of the following accounts would appear on a budgeted balance sheet?

The sales budget is derived from the production budget.

Zhang Industries budgets production of 300 units in June and 310 units in July.Each unit requires 1.5 hours of direct labor.The direct labor rate if $14 per hour.The indirect labor rate is $21.00 per hour.Compute the budgeted direct labor cost for July.

Personnel who will have performance evaluated according to the budget standards should not be consulted and involved in preparing the budget.

A budget is best described as:

A budget is a formal statement of future plans,usually expressed in monetary terms.

Which of the following budgets is not a budget that a manufacturer would include in its master budget?

The selling expenses budget is normally prepared before the sales budget because selling expenses affect the amount of sales.

Budgeting is an informal plan for future business activities.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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