Question 1

The cash budget is the first budget prepared in the master budget.

Accepted Answer

A) True 
 B)False

Question 2

Budgeted purchases are equal to the cost of goods sold plus any beginning inventory.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is NOT an operating budget?

Accepted Answer

A)  Sales budget 
B)  Operating expenses budget 
C)  Budgeted income statement 
D)  Cash budget 
A)  Sales budget 
B)  Operating expenses budget 
C)  Budgeted income statement 
D)  Cash budget

Question 4

Expenses that are NOT influenced by sales or other cost-driver activity include all of the following EXCEPT

Accepted Answer

A)  delivery expenses. 
B)  rent expense. 
C)  insurance expense. 
D)  amortization expense. 
A)  delivery expenses. 
B)  rent expense. 
C)  insurance expense. 
D)  amortization expense.

Question 5

A budget that details the planned expenditures for facilities, equipment, new products and other long-term investments.

Accepted Answer

The answer of A budget that details the planned expenditures...

Question 6

Mickle Company has the following information:
   Purchases are paid for in the following manner:
20 percent in the month of purchase
50 percent in the month after purchase
30 percent two months after purchase
-The cash disbursements in December for October purchases will be

Accepted Answer

A)  $108,750. 
B)  $ 43,500. 
C)  $ 65,250. 
D)  $ 46,000. 
A)  $108,750. 
B)  $ 43,500. 
C)  $ 65,250. 
D)  $ 46,000.

Question 7

Adel, Inc. has the following information:
   Budgeted Expenses per Month
   Note: All cash expenses are paid as incurred.
-Cash disbursements can be made for all of the following EXCEPT

Accepted Answer

A)  merchandise. 
B)  payroll. 
C)  sales. 
D)  fixed assets. 
A)  merchandise. 
B)  payroll. 
C)  sales. 
D)  fixed assets.

Question 8

Master budgets are sometimes called

Accepted Answer

A)  pro forma statements. 
B)  capital budgets. 
C)  strategic plans. 
D)  accounting budgets. 
A)  pro forma statements. 
B)  capital budgets. 
C)  strategic plans. 
D)  accounting budgets.

Question 9

The master budget quantifies targets for all of the following EXCEPT

Accepted Answer

A)  sales. 
B)  production. 
C)  markets. 
D)  cost-driver activity. 
A)  sales. 
B)  production. 
C)  markets. 
D)  cost-driver activity.

Question 10

Decisions made during long-range planning include all of the following EXCEPT

Accepted Answer

A)  addition or deletion of product line. 
B)  design and location of new plants. 
C)  acquisitions of buildings and equipment. 
D)  acquisition of office supplies. 
A)  addition or deletion of product line. 
B)  design and location of new plants. 
C)  acquisitions of buildings and equipment. 
D)  acquisition of office supplies.

Question 11

Mickle Company has the following information:
   Purchases are paid for in the following manner:
20 percent in the month of purchase
50 percent in the month after purchase
30 percent two months after purchase
-An extremely powerful and flexible tool for budgeting is a(n)

Accepted Answer

A)  spreadsheet. 
B)  budget model. 
C)  worksheet. 
D)  accounting model. 
A)  spreadsheet. 
B)  budget model. 
C)  worksheet. 
D)  accounting model.

Question 12

Managers need budgets for all of the following reasons EXCEPT

Accepted Answer

A)  to guide them in allocating resources. 
B)  to maintain control. 
C)  to enable them to measure and reward progress. 
D)  to determine which individual to hire. 
A)  to guide them in allocating resources. 
B)  to maintain control. 
C)  to enable them to measure and reward progress. 
D)  to determine which individual to hire.

Question 13

Miller Company has the following data:
   The gross profit rate is 40 percent, and the inventory at the end of December was $72,000. Desired inventory levels are 30 percent of next month's sales.
-The total purchases budgeted for March should be

Accepted Answer

A)  $350,400. 
B)  $264,000. 
C)  $271,200. 
D)  $176,000. 
A)  $350,400. 
B)  $264,000. 
C)  $271,200. 
D)  $176,000.

Question 14

A plan that sets the overall goals and objectives of the organization.

Accepted Answer

The answer of A plan that sets the overall goals...

Question 15

Miller Company has the following data:
   The gross profit rate is 40 percent, and the inventory at the end of December was $72,000. Desired inventory levels are 30 percent of next month's sales.
-The desired ending inventory for April is

Accepted Answer

A)  $ 86,400. 
B)  $ 57,600. 
C)  $144,000. 
D)  undeterminable. 
A)  $ 86,400. 
B)  $ 57,600. 
C)  $144,000. 
D)  undeterminable.

Question 16

Mickle Company has the following information:
   Purchases are paid for in the following manner:
20 percent in the month of purchase
50 percent in the month after purchase
30 percent two months after purchase
-The total cash disbursements in December for the purchase of merchandise should be

Accepted Answer

A)  $202,500. 
B)  $230,000. 
C)  $ 46,000. 
D)  $184,000. 
A)  $202,500. 
B)  $230,000. 
C)  $ 46,000. 
D)  $184,000.

Question 17

Budgeting forces managers to think ahead and to anticipate and prepare for changing conditions.

Accepted Answer

A) True 
 B)False

Question 18

An example of an operating budget is a(n)

Accepted Answer

A)  capital budget. 
B)  cash budget. 
C)  sales budget. 
D)  budgeted balance sheet. 
A)  capital budget. 
B)  cash budget. 
C)  sales budget. 
D)  budgeted balance sheet.

Question 19

Important factors considered by sales forecasters include all of the following EXCEPT

Accepted Answer

A)  past patterns of sales. 
B)  estimates made by the sales force. 
C)  changes in product mix. 
D)  the desired level of sales. 
A)  past patterns of sales. 
B)  estimates made by the sales force. 
C)  changes in product mix. 
D)  the desired level of sales.

Question 20

The first step in preparing the operating budget is preparing the

Accepted Answer

A)  sales budget. 
B)  operating expense budget. 
C)  purchases budget. 
D)  budgeted income statement. 
A)  sales budget. 
B)  operating expense budget. 
C)  purchases budget. 
D)  budgeted income statement.

The cash budget is the first budget prepared in the master budget.

Budgeted purchases are equal to the cost of goods sold plus any beginning inventory.

Which of the following is NOT an operating budget?

Expenses that are NOT influenced by sales or other cost-driver activity include all of the following EXCEPT

A budget that details the planned expenditures for facilities, equipment, new products and other long-term investments.

Mickle Company has the following information: Purchases are paid for in the following manner: 20 percent in the month of purchase 50 percent in the month after purchase 30 percent two months after purchase -The cash disbursements in December for October purchases will be

Adel, Inc. has the following information: Budgeted Expenses per Month Note: All cash expenses are paid as incurred. -Cash disbursements can be made for all of the following EXCEPT

Master budgets are sometimes called

The master budget quantifies targets for all of the following EXCEPT

Decisions made during long-range planning include all of the following EXCEPT

Mickle Company has the following information: Purchases are paid for in the following manner: 20 percent in the month of purchase 50 percent in the month after purchase 30 percent two months after purchase -An extremely powerful and flexible tool for budgeting is a(n)

Managers need budgets for all of the following reasons EXCEPT

Miller Company has the following data: The gross profit rate is 40 percent, and the inventory at the end of December was $72,000. Desired inventory levels are 30 percent of next month's sales. -The total purchases budgeted for March should be

A plan that sets the overall goals and objectives of the organization.

Miller Company has the following data: The gross profit rate is 40 percent, and the inventory at the end of December was $72,000. Desired inventory levels are 30 percent of next month's sales. -The desired ending inventory for April is

Mickle Company has the following information: Purchases are paid for in the following manner: 20 percent in the month of purchase 50 percent in the month after purchase 30 percent two months after purchase -The total cash disbursements in December for the purchase of merchandise should be

Budgeting forces managers to think ahead and to anticipate and prepare for changing conditions.

An example of an operating budget is a(n)

Important factors considered by sales forecasters include all of the following EXCEPT

The first step in preparing the operating budget is preparing the

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

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Exam 11: The Master Budget

The cash budget is the first budget prepared in the master budget.

Budgeted purchases are equal to the cost of goods sold plus any beginning inventory.

Which of the following is NOT an operating budget?

Expenses that are NOT influenced by sales or other cost-driver activity include all of the following EXCEPT

A budget that details the planned expenditures for facilities, equipment, new products and other long-term investments.

Mickle Company has the following information: Purchases are paid for in the following manner: 20 percent in the month of purchase 50 percent in the month after purchase 30 percent two months after purchase -The cash disbursements in December for October purchases will be

Adel, Inc. has the following information: Budgeted Expenses per Month Note: All cash expenses are paid as incurred. -Cash disbursements can be made for all of the following EXCEPT

Master budgets are sometimes called

The master budget quantifies targets for all of the following EXCEPT

Decisions made during long-range planning include all of the following EXCEPT

Mickle Company has the following information: Purchases are paid for in the following manner: 20 percent in the month of purchase 50 percent in the month after purchase 30 percent two months after purchase -An extremely powerful and flexible tool for budgeting is a(n)

Managers need budgets for all of the following reasons EXCEPT

Miller Company has the following data: The gross profit rate is 40 percent, and the inventory at the end of December was $72,000. Desired inventory levels are 30 percent of next month's sales. -The total purchases budgeted for March should be

A plan that sets the overall goals and objectives of the organization.

Miller Company has the following data: The gross profit rate is 40 percent, and the inventory at the end of December was $72,000. Desired inventory levels are 30 percent of next month's sales. -The desired ending inventory for April is

Mickle Company has the following information: Purchases are paid for in the following manner: 20 percent in the month of purchase 50 percent in the month after purchase 30 percent two months after purchase -The total cash disbursements in December for the purchase of merchandise should be

Budgeting forces managers to think ahead and to anticipate and prepare for changing conditions.

An example of an operating budget is a(n)

Important factors considered by sales forecasters include all of the following EXCEPT

The first step in preparing the operating budget is preparing the

Management Accounting and Management Decisions

Cost Behaviour and Cost-Volume Relationships

Measurement of Cost Behaviour

Cost Management Systems

Cost Allocation and Activity-Based Costing Systems

Job-Costing Systems

Process-Costing Systems

Relevant Information and Decision Making: Marketing Decisions

Relevant Information and Decision Making: Production Decisions

Capital Budgeting Decisions

Flexible Budgets and Variance Analysis

Management Control Systems, the Balanced Scorecard, and Responsibility Accounting

Management Control in Decentralized Organizations

Filters