Question 1

Which is true of budgets?

Accepted Answer

A)  They are voted on and approved by stockholders. 
B)  They are used in the planning, but not in the control, process. 
C)  There is a standard form and structure for budgets. 
D)  They are used in performance evaluation. 
A)  They are voted on and approved by stockholders. 
B)  They are used in the planning, but not in the control, process. 
C)  There is a standard form and structure for budgets. 
D)  They are used in performance evaluation.

Question 2

The direct materials budget shows: $\begin{array}{ll}
\text { Units to be produced } & 3,000 \
\text { Total pounds needed for production } & 9,000 \
\text { Total materials required } & 9,900
\end{array}$ What are the direct materials per unit?

Accepted Answer

A)  .33 pounds 
B)  3.0 pounds 
C)  3.3 pounds 
D)  Cannot be determined from the data provided. 
A)  .33 pounds 
B)  3.0 pounds 
C)  3.3 pounds 
D)  Cannot be determined from the data provided.

Question 3

On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale requires an ending cash balance of $40,000, the company must borrow

Accepted Answer

A)  $32,000. 
B)  $40,000. 
C)  $48,000. 
D)  $92,000. 
A)  $32,000. 
B)  $40,000. 
C)  $48,000. 
D)  $92,000.

Question 4

Which of the following does not appear as a separate section on the cash budget?

Accepted Answer

A)  Cash receipts 
B)  Cash disbursements 
C)  Capital expenditures 
D)  Financing 
A)  Cash receipts 
B)  Cash disbursements 
C)  Capital expenditures 
D)  Financing

Question 5

Which one of the following sections would not appear on a cash budget?

Accepted Answer

A)  Cash receipts 
B)  Financing 
C)  Investing 
D)  Cash disbursements 
A)  Cash receipts 
B)  Financing 
C)  Investing 
D)  Cash disbursements

Question 6

The longer the budget period, the more reliable the estimates of future outcomes.

Accepted Answer

A) True 
 B)False

Question 7

The primary benefits of budgeting include all of the following except it

Accepted Answer

A)  requires only top management to plan ahead and formalize their future goals. 
B)  provides definite objectives for evaluating performance. 
C)  creates an early warning system for potential problems. 
D)  motivates personnel throughout the organization. 
A)  requires only top management to plan ahead and formalize their future goals. 
B)  provides definite objectives for evaluating performance. 
C)  creates an early warning system for potential problems. 
D)  motivates personnel throughout the organization.

Question 8

For better management acceptance, the flow of input data for budgeting should begin with the

Accepted Answer

A)  accounting department. 
B)  top management. 
C)  lower levels of management. 
D)  budget committee. 
A)  accounting department. 
B)  top management. 
C)  lower levels of management. 
D)  budget committee.

Question 9

Lorie Nursery plans to sell 320 potted plants during April and 240 units in May. Lorie Nursery keeps 15% of the next month's sales as ending inventory. How many units should Lorie Nursery produce during April?

Accepted Answer

A)  308 
B)  332 
C)  320 
D)  356 
A)  308 
B)  332 
C)  320 
D)  356

Question 10

A budget period should be

Accepted Answer

A)  monthly. 
B)  for a year or more. 
C)  long-term. 
D)  long enough to provide an obtainable goal under normal business conditions. 
A)  monthly. 
B)  for a year or more. 
C)  long-term. 
D)  long enough to provide an obtainable goal under normal business conditions.

Question 11

The direct materials and direct labor budgets provide information for preparing the

Accepted Answer

A)  sales budget. 
B)  production budget. 
C)  manufacturing overhead budget. 
D)  cash budget. 
A)  sales budget. 
B)  production budget. 
C)  manufacturing overhead budget. 
D)  cash budget.

Question 12

If budgets are to be effective, there must be

Accepted Answer

A)  a history of successful operations. 
B)  independent verification of budget goals. 
C)  an organizational structure with clearly defined lines of authority and responsibility. 
D)  excess plant capacity. 
A)  a history of successful operations. 
B)  independent verification of budget goals. 
C)  an organizational structure with clearly defined lines of authority and responsibility. 
D)  excess plant capacity.

Question 13

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

Accepted Answer

A) True 
 B)False

Question 14

Grey Company has 24,000 units in beginning finished goods. If sales are expected to be 120,000 units for the year and Grey desires ending finished goods of 30,000 units, how many units must the company produce?

Accepted Answer

A)  114,000 
B)  120,000 
C)  126,000 
D)  150,000 
A)  114,000 
B)  120,000 
C)  126,000 
D)  150,000

Question 15

Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?

Accepted Answer

A)  $135,000 
B)  $157,500 
C)  $202,500 
D)  $210,000 
A)  $135,000 
B)  $157,500 
C)  $202,500 
D)  $210,000

Question 16

The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements about a budgeted income statement is not true?

Accepted Answer

A)  The budgeted income statement is prepared after the financial budgets are prepared. 
B)  The budgeted income statement is prepared on the accrual basis of accounting. 
C)  The budgeted income statement can be prepared in a multiple-step format. 
D)  The budgeted income statement is prepared using the individual operating budgets. 
A)  The budgeted income statement is prepared after the financial budgets are prepared. 
B)  The budgeted income statement is prepared on the accrual basis of accounting. 
C)  The budgeted income statement can be prepared in a multiple-step format. 
D)  The budgeted income statement is prepared using the individual operating budgets.

Question 18

Mapleview, Inc. has the following budgeted sales: July $200,000, August $300,000, and September $250,000. 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 September are

Accepted Answer

A)  $280,000. 
B)  $265,000. 
C)  $262,500. 
D)  $250,000. 
A)  $280,000. 
B)  $265,000. 
C)  $262,500. 
D)  $250,000.

Question 19

A common starting point in the budgeting process is

Accepted Answer

A)  expected future net income. 
B)  past performance. 
C)  to motivate the sales force. 
D)  a clean slate, with no expectations. 
A)  expected future net income. 
B)  past performance. 
C)  to motivate the sales force. 
D)  a clean slate, with no expectations.

Question 20

The following credit sales are budgeted by Terra Co.: $$\begin{array} { l r } 
\text { January } & \$ 204,000 \
\text { February } & 300,000 \
\text { March } & 420,000 \
\text { April } & 360,000
\end{array}$$ The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of April is

Accepted Answer

A)  $370,320. 
B)  $336,000. 
C)  $360,000. 
D)  $352,800. 
A)  $370,320. 
B)  $336,000. 
C)  $360,000. 
D)  $352,800.

Which is true of budgets?

The direct materials budget shows: Units to be produced 3,000 Total pounds needed for production 9,000 Total materials required 9,900 What are the direct materials per unit?

On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale requires an ending cash balance of $40,000, the company must borrow

Which of the following does not appear as a separate section on the cash budget?

Which one of the following sections would not appear on a cash budget?

The longer the budget period, the more reliable the estimates of future outcomes.

The primary benefits of budgeting include all of the following except it

For better management acceptance, the flow of input data for budgeting should begin with the

Lorie Nursery plans to sell 320 potted plants during April and 240 units in May. Lorie Nursery keeps 15% of the next month's sales as ending inventory. How many units should Lorie Nursery produce during April?

A budget period should be

The direct materials and direct labor budgets provide information for preparing the

If budgets are to be effective, there must be

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

Grey Company has 24,000 units in beginning finished goods. If sales are expected to be 120,000 units for the year and Grey desires ending finished goods of 30,000 units, how many units must the company produce?

The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first.

Which of the following statements about a budgeted income statement is not true?

Mapleview, Inc. has the following budgeted sales: July $200,000, August $300,000, and September $250,000. 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 September are

A common starting point in the budgeting process is

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

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Exam 9: Budgetary Planning

Which is true of budgets?

The direct materials budget shows: Units to be produced 3,000 Total pounds needed for production 9,000 Total materials required 9,900 What are the direct materials per unit?

On January 1, Kale Company has a beginning cash balance of $42,000. During the year, the company expects cash disbursements of $340,000 and cash receipts of $290,000. If Kale requires an ending cash balance of $40,000, the company must borrow

Which of the following does not appear as a separate section on the cash budget?

Which one of the following sections would not appear on a cash budget?

The longer the budget period, the more reliable the estimates of future outcomes.

The primary benefits of budgeting include all of the following except it

For better management acceptance, the flow of input data for budgeting should begin with the

Lorie Nursery plans to sell 320 potted plants during April and 240 units in May. Lorie Nursery keeps 15% of the next month's sales as ending inventory. How many units should Lorie Nursery produce during April?

A budget period should be

The direct materials and direct labor budgets provide information for preparing the

If budgets are to be effective, there must be

The flow of input data for budgeting should be from the highest levels of responsibility to the lowest.

Grey Company has 24,000 units in beginning finished goods. If sales are expected to be 120,000 units for the year and Grey desires ending finished goods of 30,000 units, how many units must the company produce?

The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first.

Which of the following statements about a budgeted income statement is not true?

Mapleview, Inc. has the following budgeted sales: July $200,000, August $300,000, and September $250,000. 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 September are

A common starting point in the budgeting process is

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Statement of Cash Flows

Financial Statement Analysis

Filters