Question 1

What is a capital expenditures budget?

Accepted Answer

The capital expenditures budge

Question 2

To determine the production budget for an accounting period,consideration is given to all of the following except:

Accepted Answer

A) Budgeted ending inventory. 
B) Budgeted beginning inventory. 
C) Budgeted sales. 
D) Budgeted overhead. 
E) Ratio of inventory to future sales. 
A) Budgeted ending inventory. 
B) Budgeted beginning inventory. 
C) Budgeted sales. 
D) Budgeted overhead. 
E) Ratio of inventory to future sales.

Question 3

Which of the following is a benefit derived from budgeting?

Accepted Answer

A) Budgeting focuses management's attention on the future. 
B) Budgeting provides coordination of departments. 
C) Budgeting provides a basis for evaluating performance. 
D) Budgeting provides motivation for managers and employees. 
E) All of the choices are benefits derived from budgeting. 
A) Budgeting focuses management's attention on the future. 
B) Budgeting provides coordination of departments. 
C) Budgeting provides a basis for evaluating performance. 
D) Budgeting provides motivation for managers and employees. 
E) All of the choices are benefits derived from budgeting.

Question 4

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

Accepted Answer

A) True 
 B)False

Question 5

The sales budget for Carmel shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12,respectively.The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units.The beginning inventory of Product B is 2,500 units.The desired ending inventory of B is 3,000 units.Budgeted purchases of Product A for the year would be:

Accepted Answer

A) 22,400 units. 
B) 20,400 units. 
C) 20,000 units. 
D) 19,500 units. 
E) 12,200 units. 
A) 22,400 units. 
B) 20,400 units. 
C) 20,000 units. 
D) 19,500 units. 
E) 12,200 units.

Question 6

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 7

The manufacturing budget shows only the direct materials needed for production.

Accepted Answer

A) True 
 B)False

Question 8

Operating budgets include all the following budgets except the:

Accepted Answer

A) Sales budget. 
B) Selling expense budget. 
C) Cash budget. 
D) Merchandise purchases budget. 
E) General and administrative expense budget. 
A) Sales budget. 
B) Selling expense budget. 
C) Cash budget. 
D) Merchandise purchases budget. 
E) General and administrative expense budget.

Question 9

The budgets within the master budget must be prepared in a definite sequence as dictated by GAAP.

Accepted Answer

A) True 
 B)False

Question 10

The production budget for Sergei Company revealed the following production volume for the months of July - September.Each unit produced requires 2 hours of direct labor.The direct labor rate is currently $16 per hour but is predicted to be $16.75 per hour in September.Prepare a direct labor budget for Sergei Company for July - September.

Accepted Answer

The answer of The production budget for Sergei Company revealed...

Question 11

What is activity-based budgeting?

Accepted Answer

Activity-based budgeting is a budget sys

Question 12

The sales budget is derived from the production budget.

Accepted Answer

A) True 
 B)False

Question 13

The task of preparing a budget should be the sole task of the most important department in an organization.

Accepted Answer

A) True 
 B)False

Question 14

Financial budgets are normally completed after preparation of operating and capital expenditure budgets.

Accepted Answer

A) True 
 B)False

Question 15

In preparing a budget for the last three months of the current year,Urban 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 32,500 units,respectively.How many units must be ordered in November?

Accepted Answer

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

Question 16

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 17

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 18

A plan that lists dollar amounts to be received from disposing of plant assets and dollar amounts to be spent on purchasing additional plant assets is called a:

Accepted Answer

A) Cash budget. 
B) Capital expenditures budget. 
C) Rolling budget. 
D) Sales budget. 
E) Production budget. 
A) Cash budget. 
B) Capital expenditures budget. 
C) Rolling budget. 
D) Sales budget. 
E) Production budget.

Question 19

The process of evaluating performance can be improved by using budgets.

Accepted Answer

A) True 
 B)False

Question 20

Slim Corp.requires a minimum $8,000 cash balance.If necessary,loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly).Loans are repaid at month's end from any excess cash.The cash balance on July 1 is $8,400.Cash receipts other than for loans received for July,August,and September are forecasted as $24,000,$32,000,and $40,000,respectively.Payments other than for loan or interest payments for the same period are planned at $28,000,$30,000,and $32,000,respectively at July 1,there are no outstanding loans.
Required:
Prepare a cash budget for July,August,and September.

Accepted Answer

@#IMG-DLM& * $3,600 * 1% = $36

Exam 22: Master Budgets and Planning

What is a capital expenditures budget?

To determine the production budget for an accounting period,consideration is given to all of the following except:

Which of the following is a benefit derived from budgeting?

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

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

The manufacturing budget shows only the direct materials needed for production.

Operating budgets include all the following budgets except the:

The budgets within the master budget must be prepared in a definite sequence as dictated by GAAP.

What is activity-based budgeting?

The sales budget is derived from the production budget.

The task of preparing a budget should be the sole task of the most important department in an organization.

Financial budgets are normally completed after preparation of operating and capital expenditure budgets.

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

A plan that lists dollar amounts to be received from disposing of plant assets and dollar amounts to be spent on purchasing additional plant assets is called a:

The process of evaluating performance can be improved by using budgets.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

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 Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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