Question 1

- The amount of cash paid for S&A expenses during the month of November is:

Accepted Answer

A)  $21,000 
B)  $22,200 
C)  $21,700 
D)  $23,200 
A)  $21,000 
B)  $22,200 
C)  $21,700 
D)  $23,200

Question 2

Cheyenne Company has budgeted the following information for June: $\begin{array}{llr}
  \text { Cash receipts } &\$271,000\
 \text {Beginning cash balance  } &5,000\
 \text { Cash payments } &280,000\
 \text { Desired ending cash balance } &25,000
\end{array}$
 If there is a cash shortage, the company borrows money from the bank. All cash is borrowed at the beginning of the month in $1,000 increments, and interest is paid monthly at 1% on the first day of the following month. The company had no debt before June 1. The amount of interest paid on July 1 would be:

Accepted Answer

A)  $250. 
B)  $400. 
C)  $221. 
D)  $290. 
A)  $250. 
B)  $400. 
C)  $221. 
D)  $290.

Question 3

What is the role of top management in a participative budgeting system?

Accepted Answer

A)  Top management has no role-the budget is entirely developed by the lower-level employees. 
B)  Top management must always tighten employee-set budget standards to eliminate employees' attempts to build slack into the standards. 
C)  Top management must ensure that employee-generated objectives are consistent with those of the company. 
D)  All of the answers are correct. 
A)  Top management has no role-the budget is entirely developed by the lower-level employees. 
B)  Top management must always tighten employee-set budget standards to eliminate employees' attempts to build slack into the standards. 
C)  Top management must ensure that employee-generated objectives are consistent with those of the company. 
D)  All of the answers are correct.

Question 4

The budgeting technique that provides for employee input into the planning process is known as:

Accepted Answer

A)  continuous budgeting. 
B)  perpetual budgeting. 
C)  participative budgeting. 
D)  zero-based budgeting. 
A)  continuous budgeting. 
B)  perpetual budgeting. 
C)  participative budgeting. 
D)  zero-based budgeting.

Question 5

-What is the total amount of S&A expenses for the fourth quarter that the company will report on its pro forma income statement?

Accepted Answer

A)  $64,400 
B)  $68,900 
C)  $23,700 
D)  $63,900 
A)  $64,400 
B)  $68,900 
C)  $23,700 
D)  $63,900

Question 6

Which of the following cash budget equations is incorrect?

Accepted Answer

A)  Cash payments + cash receipts = cash requirements 
B)  Beginning cash + cash receipts = total cash available 
C)  Cash payments + cash cushion = total cash needed 
D)  Period 1 ending cash balance = Period 2 beginning cash balance 
A)  Cash payments + cash receipts = cash requirements 
B)  Beginning cash + cash receipts = total cash available 
C)  Cash payments + cash cushion = total cash needed 
D)  Period 1 ending cash balance = Period 2 beginning cash balance

Question 7

Budgeting that involves decisions such as whether to buy or lease equipment or build a new factory is referred to as:

Accepted Answer

A)  capital budgeting. 
B)  operations budgeting. 
C)  facilities planning. 
D)  strategic planning. 
A)  capital budgeting. 
B)  operations budgeting. 
C)  facilities planning. 
D)  strategic planning.

Question 8

The master budget includes several individual budgets, which are interdependent. Provide at least two examples of connections (relationships) among budgets.

Accepted Answer

There are several connections among the

Question 9

The responsibility for the coordination of a company's budgeting activities normally rests with the Chief Financial Officer (CFO).

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would represent the order in which most master budgets are prepared?

Accepted Answer

A)  Sales, Income Statement, Cash, Purchases 
B)  Purchases, Cash, Sales, Income Statement 
C)  Purchases, Sales, Cash, Income Statement 
D)  Sales, Purchases, Cash, Income Statement 
A)  Sales, Income Statement, Cash, Purchases 
B)  Purchases, Cash, Sales, Income Statement 
C)  Purchases, Sales, Cash, Income Statement 
D)  Sales, Purchases, Cash, Income Statement

Question 11

Skymont Company wants an ending inventory each month equal to 25% of that month's cost of goods sold. Cost of goods sold for February is projected at $90,000. Ending inventory at the end of January was $18,000. Based on this information, purchases for February would be:

Accepted Answer

A)  $67,500. 
B)  $94,500. 
C)  $72,000. 
D)  $85,500. 
A)  $67,500. 
B)  $94,500. 
C)  $72,000. 
D)  $85,500.

Question 12

Which of the following is generally included in a sales budget?

Accepted Answer

A)  Schedule of cash receipts for the projected sales 
B)  Desired ending inventory 
C)  Budgeted cost of goods sold 
D)  Schedule of cash payments for inventory purchases 
A)  Schedule of cash receipts for the projected sales 
B)  Desired ending inventory 
C)  Budgeted cost of goods sold 
D)  Schedule of cash payments for inventory purchases

Question 13

How do budget expectations influence a company's employees?

Accepted Answer

Employees often find budgets to be const

Question 14

Compton Company expects the following total sales: $$\begin{array} { l l } 
\text { Manth } & \text { Sales } \
\text { March } & \$ 30,000 \
\text { April } & \$ 20,000 \
\text { May } & \$ 30,000 \
\text { Jure } & \$ 25,000
\end{array}$$ The company expects 60% of its sales to be credit sales and 40% for cash. Credit sales are collected as follows: 30% in the month of sale, 70% in the month following the sale. The budgeted accounts receivable balance on May 31 is:

Accepted Answer

A)  $12,240. 
B)  $12,600. 
C)  $20,400. 
D)  $21,000. 
A)  $12,240. 
B)  $12,600. 
C)  $20,400. 
D)  $21,000.

Question 15

Match between columns
                        Premises:  This shows the inventory needs for each month.
 This shows the projected financial condition of the company at the end of the budget period.
 Comparison of actual results to budget expectations in order to evaluate employee and/or department performance.
 Expected borrowing (financing activities) and related interest expense are shown in this budget.
 This budget is the starting point for the entire master budget.
 These are based on projected rather than historical information.
 This provides an advance estimate of the expected profitability.

Accepted Answer

The Answer of Cash budget and Inventory purchases budget and is...

Question 16

Accepted Answer

The answer of  ...

Question 17

Would you recommend that a business employ a participative approach to budgeting? Why or why not?

Accepted Answer

Participative budgeting offers many adva

Question 18

Bright Minds Toy Company prepared the following sales budget for the second quarter. Projected sales for each of the first three months of operations are as follows: $\begin{array}{lccc}
\text { Sales Budget } & \text { April } & \text { May } & \text { June } \
\text { Cash sales } & 30,000 & 43,000 & 55,000 \
\text { Sales on account } & \underline{ 370,000 }&  \underline{432,000 }& \underline{ 405,000}\
& \underline{400,000}& \underline{475,000}& \underline{460,000}
\end{array}$

- Bright Minds expects to collect 70% of the sales on account in the month of sale, 20% in the month following the sale, and the remainder in the second month following the sale.
What is the ending accounts receivable balance that would be reported on the pro forma balance sheet prepared as of June 30?

Accepted Answer

A)  $164,700 
B)  $121,500 
C)  $283,500 
D)  $86,400 
A)  $164,700 
B)  $121,500 
C)  $283,500 
D)  $86,400

Question 19

Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% each month. How many units will need to be purchased in February if the company's policy is to keep ending inventory each month at 10,000 units?

Accepted Answer

A)  52,000 units 
B)  54,000 units 
C)  62,000 units 
D)  None of these answers is correct. 
A)  52,000 units 
B)  54,000 units 
C)  62,000 units 
D)  None of these answers is correct.

Question 20

Hilliard Company budgeted the following transactions for April Year 2: $\begin{array}{llr}
 \text { Sales (75\% collected in month of sale) }&\$200,000\
 \text {Cash operating expenses  } &105,000\
 \text { Cash purchases of investments } &75,000\
 \text {  cash payment of debt} &15,000\
 \text {  Depreciation on operating assets} &12,000\
\end{array}$
 The beginning cash balance was $50,000. The company desires to have a $25,000 ending cash balance. The surplus (or shortage) of cash before considering any borrowings in April would be:

Accepted Answer

A)  $40,000 surplus. 
B)  $40,000 shortage. 
C)  $20,000 shortage. 
D)  There is no cash surplus or shortage. 
A)  $40,000 surplus. 
B)  $40,000 shortage. 
C)  $20,000 shortage. 
D)  There is no cash surplus or shortage.

- The amount of cash paid for S&A expenses during the month of November is:

What is the role of top management in a participative budgeting system?

The budgeting technique that provides for employee input into the planning process is known as:

-What is the total amount of S&A expenses for the fourth quarter that the company will report on its pro forma income statement?

Which of the following cash budget equations is incorrect?

Budgeting that involves decisions such as whether to buy or lease equipment or build a new factory is referred to as:

The master budget includes several individual budgets, which are interdependent. Provide at least two examples of connections (relationships) among budgets.

The responsibility for the coordination of a company's budgeting activities normally rests with the Chief Financial Officer (CFO).

Which of the following would represent the order in which most master budgets are prepared?

Skymont Company wants an ending inventory each month equal to 25% of that month's cost of goods sold. Cost of goods sold for February is projected at $90,000. Ending inventory at the end of January was $18,000. Based on this information, purchases for February would be:

Which of the following is generally included in a sales budget?

How do budget expectations influence a company's employees?

Would you recommend that a business employ a participative approach to budgeting? Why or why not?

Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% each month. How many units will need to be purchased in February if the company's policy is to keep ending inventory each month at 10,000 units?

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Performance Evaluation

Planning for Capital Investments

Filters

Exam 14: Planning for Profit and Cost Control

- The amount of cash paid for S&A expenses during the month of November is:

What is the role of top management in a participative budgeting system?

The budgeting technique that provides for employee input into the planning process is known as:

-What is the total amount of S&A expenses for the fourth quarter that the company will report on its pro forma income statement?

Which of the following cash budget equations is incorrect?

Budgeting that involves decisions such as whether to buy or lease equipment or build a new factory is referred to as:

The master budget includes several individual budgets, which are interdependent. Provide at least two examples of connections (relationships) among budgets.

The responsibility for the coordination of a company's budgeting activities normally rests with the Chief Financial Officer (CFO).

Which of the following would represent the order in which most master budgets are prepared?

Skymont Company wants an ending inventory each month equal to 25% of that month's cost of goods sold. Cost of goods sold for February is projected at $90,000. Ending inventory at the end of January was $18,000. Based on this information, purchases for February would be:

Which of the following is generally included in a sales budget?

How do budget expectations influence a company's employees?

Would you recommend that a business employ a participative approach to budgeting? Why or why not?

Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% each month. How many units will need to be purchased in February if the company's policy is to keep ending inventory each month at 10,000 units?

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Performance Evaluation

Planning for Capital Investments

Filters