Question 1

The ________ technique asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Accepted Answer

A) sensitivity analysis 
B) ratio analysis 
C) risk analysis 
D) strategic analysis 
A) sensitivity analysis 
B) ratio analysis 
C) risk analysis 
D) strategic analysis

Question 2

Crafty Carpentry Company produces and sells a shelf for $25 each. The beginning inventory is 2,000 shelves, and the desired ending inventory is 2,200 shelves. If budgeted production is 12,500 shelves, what is the forecasted sales revenue from the shelves?

Accepted Answer

A) $417,500 
B) $307,500 
C) $317,500 
D) $207,500 
A) $417,500 
B) $307,500 
C) $317,500 
D) $207,500

Question 3

Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet?

Accepted Answer

A) Purchases budget 
B) Capital expenditures budget 
C) Financial budget 
D) Cash budget 
A) Purchases budget 
B) Capital expenditures budget 
C) Financial budget 
D) Cash budget

Question 4

Two Brothers Moving prepared the following sales budget:   Credit collections are 25% in the month of sale, 60% in the month following the sale, and 10% two months following the sale. The remaining 5% is expected to be uncollectible.
What are the total cash collections in June?

Accepted Answer

A) $37,600 
B) $86,800 
C) $91,600 
D) $96,300 
A) $37,600 
B) $86,800 
C) $91,600 
D) $96,300

Question 5

Feeney Furniture prepared the following sales budget:   Credit collections are 15% two months following the sale, 50% in the month following the sale and 30% in the month of sale. The remaining 5% is expected to be uncollectible.
What are the total cash collections in May?

Accepted Answer

A) $21,500 
B) $63,500 
C) $65,900 
D) $75,600 
A) $21,500 
B) $63,500 
C) $65,900 
D) $75,600

Question 6

Natcher Corporation collects 30% of a month's sales in the month of sale, 55% in the month following sale, and 10% in the second month following sale. The company has found that 5% of their sales are uncollectible. Budgeted sales for the upcoming four months are:   The amount of cash that will be collected in November is budgeted to be

Accepted Answer

A) $287,500. 
B) $283,000. 
C) $78,000. 
D) $291,500. 
A) $287,500. 
B) $283,000. 
C) $78,000. 
D) $291,500.

Question 7

Which of the following statements about budgeting is not true?

Accepted Answer

A) Budgeting is an aid to planning and control. 
B) The operating budget should be prepared by top management, rather than mid-management personnel, because they have the overall objectives of the company in mind. 
C) Budgets help to coordinate the activities of the entire organization. 
D) Budgets promote communication and coordination between departments. 
A) Budgeting is an aid to planning and control. 
B) The operating budget should be prepared by top management, rather than mid-management personnel, because they have the overall objectives of the company in mind. 
C) Budgets help to coordinate the activities of the entire organization. 
D) Budgets promote communication and coordination between departments.

Question 8

The cash budget helps managers determine whether or not the company will need financing in a given month.

Accepted Answer

A) True 
 B)False

Question 9

Budgets are used for all of the following, except

Accepted Answer

A) planning for the future. 
B) controlling operations. 
C) recording actual results. 
D) directing operations. 
A) planning for the future. 
B) controlling operations. 
C) recording actual results. 
D) directing operations.

Question 10

Strategic planning involves setting long-term goals that extend 5-10 years into the future.

Accepted Answer

A) True 
 B)False

Question 11

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Accepted Answer

A) desired ending inventory + beginning inventory - cost of goods sold. 
B) cost of goods sold + desired ending inventory - beginning inventory. 
C) cost of goods sold - desired ending inventory + beginning inventory. 
D) desired ending inventory - beginning inventory - cost of goods sold. 
A) desired ending inventory + beginning inventory - cost of goods sold. 
B) cost of goods sold + desired ending inventory - beginning inventory. 
C) cost of goods sold - desired ending inventory + beginning inventory. 
D) desired ending inventory - beginning inventory - cost of goods sold.

Question 12

Which of the following types of cash outlays has its own budget?

Accepted Answer

A) Capital expenditures 
B) Dividends 
C) Income taxes 
D) All of the above 
A) Capital expenditures 
B) Dividends 
C) Income taxes 
D) All of the above

Question 13

All of the following budgets are prepared by merchandising companies except

Accepted Answer

A) manufacturing overhead. 
B) capital expenditures. 
C) budgeted income statement. 
D) cash. 
A) manufacturing overhead. 
B) capital expenditures. 
C) budgeted income statement. 
D) cash.

Question 14

One of the key benefits of budgeting is that it forces managers to plan.

Accepted Answer

A) True 
 B)False

Question 15

Dallas Corporation had beginning inventory of 19,500 units and expects sales of 85,000 units during the year. Desired ending inventory is 18,500 units. How many units should Dallas Corporation produce?

Accepted Answer

A) 84,000 units 
B) 47,000 units 
C) 86,000 units 
D) 123,000 units 
A) 84,000 units 
B) 47,000 units 
C) 86,000 units 
D) 123,000 units

Question 16

Goddard's Department Store has budgeted cost of goods sold of $44,000 for its men's shorts in March. Management also wants to have $8,000 of men's shorts in inventory at the end of March to prepare for the summer season. Beginning inventory of men's shorts for March is expected to be $5,500. What dollar amount of men's shorts should be purchased in March?

Accepted Answer

A) $46,500 
B) $41,500 
C) $57,500 
D) $30,500 
A) $46,500 
B) $41,500 
C) $57,500 
D) $30,500

Question 17

The master budget includes both the operating budgets and the financial budgets.

Accepted Answer

A) True 
 B)False

Question 18

"The comprehensive budget" is best described by which term below?

Accepted Answer

A) Operating budget 
B) Sensitivity analysis 
C) Responsibility center 
D) Master budget 
A) Operating budget 
B) Sensitivity analysis 
C) Responsibility center 
D) Master budget

Question 19

Goliath Company prepared the following purchases budget:   All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase.
What are the cash disbursements in August for June purchases?

Accepted Answer

A) $10,680 
B) $20,610 
C) $16,020 
D) $8,900 
A) $10,680 
B) $20,610 
C) $16,020 
D) $8,900

Question 20

Russell Company expects cash sales for July of $15,000, and a 22% monthly increase during August and September. Credit sales of $6,000 in July should be followed by 15% decreases during August and September. What are budgeted cash sales and budgeted credit sales for September?

Accepted Answer

A) $18,300 and $5,100 
B) $22,326 and $4,335 
C) $12,750 and $7,320 
D) $10,838 and $8,930 
A) $18,300 and $5,100 
B) $22,326 and $4,335 
C) $12,750 and $7,320 
D) $10,838 and $8,930

The ________ technique asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Crafty Carpentry Company produces and sells a shelf for $25 each. The beginning inventory is 2,000 shelves, and the desired ending inventory is 2,200 shelves. If budgeted production is 12,500 shelves, what is the forecasted sales revenue from the shelves?

Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet?

Two Brothers Moving prepared the following sales budget: Credit collections are 25% in the month of sale, 60% in the month following the sale, and 10% two months following the sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in June?

Feeney Furniture prepared the following sales budget: Credit collections are 15% two months following the sale, 50% in the month following the sale and 30% in the month of sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in May?

Which of the following statements about budgeting is not true?

The cash budget helps managers determine whether or not the company will need financing in a given month.

Budgets are used for all of the following, except

Strategic planning involves setting long-term goals that extend 5-10 years into the future.

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Which of the following types of cash outlays has its own budget?

All of the following budgets are prepared by merchandising companies except

One of the key benefits of budgeting is that it forces managers to plan.

Dallas Corporation had beginning inventory of 19,500 units and expects sales of 85,000 units during the year. Desired ending inventory is 18,500 units. How many units should Dallas Corporation produce?

The master budget includes both the operating budgets and the financial budgets.

"The comprehensive budget" is best described by which term below?

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase. What are the cash disbursements in August for June purchases?

Russell Company expects cash sales for July of $15,000, and a 22% monthly increase during August and September. Credit sales of $6,000 in July should be followed by 15% decreases during August and September. What are budgeted cash sales and budgeted credit sales for September?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 9: The Master Budget

The ________ technique asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Crafty Carpentry Company produces and sells a shelf for $25 each. The beginning inventory is 2,000 shelves, and the desired ending inventory is 2,200 shelves. If budgeted production is 12,500 shelves, what is the forecasted sales revenue from the shelves?

Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet?

Two Brothers Moving prepared the following sales budget: Credit collections are 25% in the month of sale, 60% in the month following the sale, and 10% two months following the sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in June?

Feeney Furniture prepared the following sales budget: Credit collections are 15% two months following the sale, 50% in the month following the sale and 30% in the month of sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in May?

Which of the following statements about budgeting is not true?

The cash budget helps managers determine whether or not the company will need financing in a given month.

Budgets are used for all of the following, except

Strategic planning involves setting long-term goals that extend 5-10 years into the future.

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Which of the following types of cash outlays has its own budget?

All of the following budgets are prepared by merchandising companies except

One of the key benefits of budgeting is that it forces managers to plan.

Dallas Corporation had beginning inventory of 19,500 units and expects sales of 85,000 units during the year. Desired ending inventory is 18,500 units. How many units should Dallas Corporation produce?

The master budget includes both the operating budgets and the financial budgets.

"The comprehensive budget" is best described by which term below?

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase. What are the cash disbursements in August for June purchases?

Russell Company expects cash sales for July of $15,000, and a 22% monthly increase during August and September. Credit sales of $6,000 in July should be followed by 15% decreases during August and September. What are budgeted cash sales and budgeted credit sales for September?

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Job Costing

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

Performance Evaluation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters