Question 1

The starting point in preparing a master budget is the preparation of the

Accepted Answer

A) production budget. 
B) sales budget. 
C) purchasing budget. 
D) personnel budget. 
A) production budget. 
B) sales budget. 
C) purchasing budget. 
D) personnel budget.

Question 2

Kam Department Store reported the following information for 2016:
 All sales are on credit.
- Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
How much cash will Kam receive in November?

Accepted Answer

A) $580,000 
B) $1,300,000 
C) $1,200,000 
D) $1,160,000 
A) $580,000 
B) $1,300,000 
C) $1,200,000 
D) $1,160,000

Question 3

Which is the last step in developing the master budget?

Accepted Answer

A) Preparing the budgeted balance sheet 
B) Preparing the cost of goods manufactured budget 
C) Preparing the budgeted income statement 
D) Preparing the cash budget 
A) Preparing the budgeted balance sheet 
B) Preparing the cost of goods manufactured budget 
C) Preparing the budgeted income statement 
D) Preparing the cash budget

Question 4

A merchandiser has a merchandise purchases budget rather than a production budget.

Accepted Answer

A) True 
 B)False

Question 5

The master budget reflects management's long-term plans encompassing five years or more.

Accepted Answer

A) True 
 B)False

Question 6

The manufacturing overhead budget shows the expected manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 7

The budget itself and the administration of the budget are entirely accounting responsibilities.

Accepted Answer

A) True 
 B)False

Question 8

Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory.
What is the total amount to be budgeted for manufacturing overhead for the month?

Accepted Answer

A) $2,871 
B) $2,970 
C) $11,484 
D) $11,880 
A) $2,871 
B) $2,970 
C) $11,484 
D) $11,880

Question 9

Accounting generally has the responsibility for

Accepted Answer

A) setting company goals. 
B) expressing the budget in financial terms. 
C) enforcing the budget. 
D) administration of the budget. 
A) setting company goals. 
B) expressing the budget in financial terms. 
C) enforcing the budget. 
D) administration of the budget.

Question 10

The following information was taken from Southgate Industry's cash budget for the month of July: $$\begin{array} { l r } 
\text { Beginning cash balance } & \$ 480,000 \
\text { Cash receipts } & 304,000 \
\text { Cash disbursements } & 544,000
\end{array}$$ If the company has a policy of maintaining a minimum end of the month cash balance of $400,000, the amount the company would have to borrow is

Accepted Answer

A) $160,000. 
B) $80,000. 
C) $240,000. 
D) $96,000. 
A) $160,000. 
B) $80,000. 
C) $240,000. 
D) $96,000.

Question 11

The single most important output in preparing financial budgets is the

Accepted Answer

A) sales forecast. 
B) determination of the unit cost of the product. 
C) cash budget. 
D) budgeted income statement. 
A) sales forecast. 
B) determination of the unit cost of the product. 
C) cash budget. 
D) budgeted income statement.

Question 12

Orange Co. is a manufacturer and Pineapple Company is a merchandiser. What is the difference in the budgets the two entities will prepare?

Accepted Answer

A) Orange Co.will prepare a production budget, and Pineapple Company will prepare a merchandise purchases budget. 
B) Orange Co.will prepare a sales forecast, and Pineapple Company will prepare a sales budget. 
C) Pineapple Company will prepare a production budget, and Orange Co.will prepare a merchandise purchases budget. 
D) Both companies will prepare the same types of budgets. 
A) Orange Co.will prepare a production budget, and Pineapple Company will prepare a merchandise purchases budget. 
B) Orange Co.will prepare a sales forecast, and Pineapple Company will prepare a sales budget. 
C) Pineapple Company will prepare a production budget, and Orange Co.will prepare a merchandise purchases budget. 
D) Both companies will prepare the same types of budgets.

Question 13

The most common budget period is

Accepted Answer

A) one month. 
B) three months. 
C) six months. 
D) one year. 
A) one month. 
B) three months. 
C) six months. 
D) one year.

Question 14

Petal Co. reported the following information for 2016:   
-All sales are on credit.
-Customer amounts on account are collected 50% in the month of sale and 50% in the following month.
How much is the November 30, 2016 budgeted Accounts Receivable?

Accepted Answer

A) $900,000 
B) $540,000 
C) $465,000 
D) $435,000 
A) $900,000 
B) $540,000 
C) $465,000 
D) $435,000

Question 15

A budget can be used as a basis for evaluating performance.

Accepted Answer

A) True 
 B)False

Question 16

The budget itself and the administration of the budget are the responsibility of the accounting department.

Accepted Answer

A) True 
 B)False

Question 17

Dolce Co. estimates its sales at 180,000 units in the first quarter and that sales will increase by 18,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.
Cash collections for the third quarter are budgeted at

Accepted Answer

A) $3,051,000. 
B) $4,428,000. 
C) $5,319,000. 
D) $6,156,000. 
A) $3,051,000. 
B) $4,428,000. 
C) $5,319,000. 
D) $6,156,000.

Question 18

Budgeting in not-for-profit organizations

Accepted Answer

A) is not important because they are not profit-oriented. 
B) usually starts with budgeting expenditures, rather than receipts. 
C) is necessary only if some product is produced and sold. 
D) consists entirely of budgeted contributions. 
A) is not important because they are not profit-oriented. 
B) usually starts with budgeting expenditures, rather than receipts. 
C) is necessary only if some product is produced and sold. 
D) consists entirely of budgeted contributions.

Question 19

Budgeted Income Statement

Accepted Answer

A) 1, 2, 3, 4 
B) 2, 3, 1, 4 
C) 2, 3, 4, 1 
D) 2, 4, 1, 3 
A) 1, 2, 3, 4 
B) 2, 3, 1, 4 
C) 2, 3, 4, 1 
D) 2, 4, 1, 3

Question 20

Astor Manufacturing has the following budgeted sales: January $120,000, February $180,000, and March $150,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during March are:

Accepted Answer

A) $168,000. 
B) $159,000. 
C) $157,500. 
D) $150,000. 
A) $168,000. 
B) $159,000. 
C) $157,500. 
D) $150,000.

The starting point in preparing a master budget is the preparation of the

Kam Department Store reported the following information for 2016: All sales are on credit. - Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Kam receive in November?

Which is the last step in developing the master budget?

A merchandiser has a merchandise purchases budget rather than a production budget.

The master budget reflects management's long-term plans encompassing five years or more.

The manufacturing overhead budget shows the expected manufacturing overhead costs.

The budget itself and the administration of the budget are entirely accounting responsibilities.

Accounting generally has the responsibility for

The single most important output in preparing financial budgets is the

Orange Co. is a manufacturer and Pineapple Company is a merchandiser. What is the difference in the budgets the two entities will prepare?

The most common budget period is

Petal Co. reported the following information for 2016: -All sales are on credit. -Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much is the November 30, 2016 budgeted Accounts Receivable?

A budget can be used as a basis for evaluating performance.

The budget itself and the administration of the budget are the responsibility of the accounting department.

Budgeting in not-for-profit organizations

Budgeted Income Statement

Astor Manufacturing has the following budgeted sales: January $120,000, February $180,000, and March $150,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during March are:

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters

Exam 20: Budgetary Planning

The starting point in preparing a master budget is the preparation of the

Kam Department Store reported the following information for 2016: All sales are on credit. - Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Kam receive in November?

Which is the last step in developing the master budget?

A merchandiser has a merchandise purchases budget rather than a production budget.

The master budget reflects management's long-term plans encompassing five years or more.

The manufacturing overhead budget shows the expected manufacturing overhead costs.

The budget itself and the administration of the budget are entirely accounting responsibilities.

Accounting generally has the responsibility for

The single most important output in preparing financial budgets is the

Orange Co. is a manufacturer and Pineapple Company is a merchandiser. What is the difference in the budgets the two entities will prepare?

The most common budget period is

Petal Co. reported the following information for 2016: -All sales are on credit. -Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much is the November 30, 2016 budgeted Accounts Receivable?

A budget can be used as a basis for evaluating performance.

The budget itself and the administration of the budget are the responsibility of the accounting department.

Budgeting in not-for-profit organizations

Budgeted Income Statement

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Filters