Question 1

Uncle's Caps, a merchandiser, wants to prepare the budgeted balance sheet for the next budget period. For this purpose the amount of ending cash balance can be retrieved from:

Accepted Answer

A) the sales budget. 
B) the budgeted funds flow statement. 
C) the cash budget. 
D) the Cost of Goods Sold budget. 
A) the sales budget. 
B) the budgeted funds flow statement. 
C) the cash budget. 
D) the Cost of Goods Sold budget.

Question 2

A budget represents the plans that a company has in place to achieve its goals.

Accepted Answer

A) True 
 B)False

Question 3

A strategic budget is a long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company.

Accepted Answer

A) True 
 B)False

Question 4

An operating budget is a short-term financial plan that coordinates activities to achieve short-term goals.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following describes the cash budget?

Accepted Answer

A) It aids in planning to ensure the company has adequate inventory and cash on hand. 
B) It captures the variable and fixed expenses of the business. 
C) It depicts the breakdown of sales based on terms of collection. 
D) It helps in planning to ensure the business has adequate cash. 
A) It aids in planning to ensure the company has adequate inventory and cash on hand. 
B) It captures the variable and fixed expenses of the business. 
C) It depicts the breakdown of sales based on terms of collection. 
D) It helps in planning to ensure the business has adequate cash.

Question 6

Nobell Inc. has a cash balance of $20,000 on April 1, 2015. They are now preparing the cash budget for the second quarter. Budgeted cash collections and payments are as follows:   There are no budgeted capital expenditures or financing transactions during the quarter. Based on the above data, calculate the projected cash balance at the end of April.

Accepted Answer

A) $22,000 
B) $35,700 
C) $23,700 
D) $22,400 
A) $22,000 
B) $35,700 
C) $23,700 
D) $22,400

Question 7

Gamma Corp. is preparing their budget for the 1st quarter of 2015. The following data is provided:   The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be:

Accepted Answer

A) $9,500. 
B) $10,700. 
C) $8,750. 
D) $9,800. 
A) $9,500. 
B) $10,700. 
C) $8,750. 
D) $9,800.

Question 8

Gamma Corp. has prepared a preliminary cash budget for the 3rd quarter as shown below:   Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000 in July, $50,000 in August, and $42,000 in September. Based on the new data, calculate the new projected cash balance at the end of July.

Accepted Answer

A) $8,500 
B) $2,400 
C) $7,000 
D) $900 
A) $8,500 
B) $2,400 
C) $7,000 
D) $900

Question 9

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of retained earnings can be taken from:

Accepted Answer

A) the inventory, purchases and cost of goods sold budget. 
B) the operating budget. 
C) the cash budget. 
D) the budgeted income statement plus the balance sheet from the prior year. 
A) the inventory, purchases and cost of goods sold budget. 
B) the operating budget. 
C) the cash budget. 
D) the budgeted income statement plus the balance sheet from the prior year.

Question 10

From the following details provided by NutShell Inc., prepare the manufacturing overhead budget for the year 2015.   Prepare the manufacturing overhead budget for the year 2015. Also, calculate the overhead allocation rate, using direct labor hours as the allocation base.

Accepted Answer

@#IMG-DLM& *VOH - Variable Man

Question 11

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of Accounts Receivable can be obtained from:

Accepted Answer

A) the inventory, purchases and cost of goods sold budget. 
B) cash receipts from customers. 
C) the capital expenditures budget. 
D) the selling and administrative expenses budget. 
A) the inventory, purchases and cost of goods sold budget. 
B) cash receipts from customers. 
C) the capital expenditures budget. 
D) the selling and administrative expenses budget.

Question 12

A master budget is the financial plan for a specific segment of an organization.

Accepted Answer

A) True 
 B)False

Question 13

A flexible budget is prepared to represent different levels of sales volume.

Accepted Answer

A) True 
 B)False

Question 14

A goal of the budgeting process is to communicate a consistent set of plans throughout the company.

Accepted Answer

A) True 
 B)False

Question 15

All organizations use one standardized budgeting process.

Accepted Answer

A) True 
 B)False

Question 16

Freightcan Holders has provided the following extracts from their budget for the first quarter of the forthcoming year:   The company collects 60% of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.

Accepted Answer

A) $ 580,000 
B) $720,000 
C) $680,000 
D) $490,000 
A) $ 580,000 
B) $720,000 
C) $680,000 
D) $490,000

Question 17

The cash budget is the prerequisite for the master budget.

Accepted Answer

A) True 
 B)False

Question 18

Gamma Corp. has prepared a preliminary cash budget for the 3rd quarter as shown below:   Subsequently, the marketing department revised its figures for cash collections. New data are as follows: $52,000 in July, $50,000 in August, and $42,000 in September. Based on the new data, calculate the new projected cash balance at the end of August.

Accepted Answer

A) $8,500 
B) $2,400 
C) $7,000 
D) $900 
A) $8,500 
B) $2,400 
C) $7,000 
D) $900

Question 19

Kapital Inc. has prepared the operating budget for the first quarter of 2015. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Variable and fixed expenses are as follows: Variable: Power cost (40% of Sales)
Miscellaneous expenses: (5% of Sales)
Fixed: Salary expense: $8,000 per month
Rent expense: $5,000 per month
Depreciation expense: $1,200 per month
Power cost/fixed portion: $800 per month
Miscellaneous expenses/fixed portion: $1,000 per month
Using the information above, calculate the amount of selling and administrative expenses for the month of February.

Accepted Answer

A) $38,500 
B) $47,500 
C) $41,700 
D) $43,000 
A) $38,500 
B) $47,500 
C) $41,700 
D) $43,000

Question 20

Nobula Corp. is preparing their budget for the 2nd quarter and provides the following data:   Assume that accounts payable pertains only to suppliers of inventory. Based on the above data, the amount of Accounts Payable that should be shown in the budgeted balance sheet as on June 30th is:

Accepted Answer

A) $12,000. 
B) $3,600. 
C) $10,800. 
D) $5,400. 
A) $12,000. 
B) $3,600. 
C) $10,800. 
D) $5,400.

Exam 22: Master Budgets

Uncle's Caps, a merchandiser, wants to prepare the budgeted balance sheet for the next budget period. For this purpose the amount of ending cash balance can be retrieved from:

A budget represents the plans that a company has in place to achieve its goals.

A strategic budget is a long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company.

An operating budget is a short-term financial plan that coordinates activities to achieve short-term goals.

Which of the following describes the cash budget?

Gamma Corp. is preparing their budget for the 1st quarter of 2015. The following data is provided: The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be:

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of retained earnings can be taken from:

From the following details provided by NutShell Inc., prepare the manufacturing overhead budget for the year 2015. Prepare the manufacturing overhead budget for the year 2015. Also, calculate the overhead allocation rate, using direct labor hours as the allocation base.

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of Accounts Receivable can be obtained from:

A master budget is the financial plan for a specific segment of an organization.

A flexible budget is prepared to represent different levels of sales volume.

A goal of the budgeting process is to communicate a consistent set of plans throughout the company.

All organizations use one standardized budgeting process.

Freightcan Holders has provided the following extracts from their budget for the first quarter of the forthcoming year: The company collects 60% of credit sales in the same month and the balance in the next month. Calculate the collections from the customers for the month of February.

The cash budget is the prerequisite for the master budget.

Nobula Corp. is preparing their budget for the 2nd quarter and provides the following data: Assume that accounts payable pertains only to suppliers of inventory. Based on the above data, the amount of Accounts Payable that should be shown in the budgeted balance sheet as on June 30th is:

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Gamma Corp. is preparing their budget for the 1^st quarter of 2015. The following data is provided: The amount of Merchandise Inventory to be shown on the budgeted balance sheet at March 31 would be:

Nobula Corp. is preparing their budget for the 2^nd quarter and provides the following data: Assume that accounts payable pertains only to suppliers of inventory. Based on the above data, the amount of Accounts Payable that should be shown in the budgeted balance sheet as on June 30th is: