Question 1

The direct materials budget is prepared using information from the ________ budget.

Accepted Answer

A)  cash 
B)  master 
C)  capital expenditure 
D)  production 
A)  cash 
B)  master 
C)  capital expenditure 
D)  production D

Question 2

List and describe the three types of budgets that are included in the master budget.

Accepted Answer

1.Operating budget - The set of budgets that projects sales revenue,cost of goods sold,and selling and administrative expenses,all of which feed into the cash budget and then the budgeted financial statements.
2.Capital expenditures budget - The budget that presents the company's plan for purchasing property,plant,equipment,and other long-term assets.
3.Financial budget - The budget that includes the cash budget and the budgeted financial statements.

Question 3

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

Accepted Answer

A) True 
 B)False  True

Question 4

The budgeted income statement________.

Accepted Answer

A)  reports cash paid for purchases of direct materials 
B)  includes amounts from the sales, cost of goods sold, cash, and capital expenditures budgets 
C)  is accrual-based 
D)  does not include depreciation expense 
A)  reports cash paid for purchases of direct materials 
B)  includes amounts from the sales, cost of goods sold, cash, and capital expenditures budgets 
C)  is accrual-based 
D)  does not include depreciation expense

Question 5

What is a common method of accessing short-term financing?

Accepted Answer

Securing a line of credit with

Question 6

When a company is preparing a budgeted statement of cash flows,the payments to suppliers for purchases of direct materials can be obtained from the ________.

Accepted Answer

A)  cash budget 
B)  sales budget 
C)  production budget 
D)  budgeted balance sheet 
A)  cash budget 
B)  sales budget 
C)  production budget 
D)  budgeted balance sheet

Question 7

Burns Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | } 
\hline& \text { Apr } & \text { May } & \text { Jun } \
\hline \text { Cash collections } & \$ 42,000 & \$ 43,000 & \$ 45,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 4,500 & 7,000 & 4,500 \
\hline \text { Operating expenses } & 6,000 & 7,000 & 4,500 \
\hline \text { Capital expenditures } & 20,000 & 20,000 & 10,000 \
\hline
\end{array}$$
 The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of June.

Accepted Answer

A)  $79,500 
B)  $25,500 
C)  $60,500 
D)  $34,500 
A)  $79,500 
B)  $25,500 
C)  $60,500 
D)  $34,500

Question 8

Star Moving Systems,Inc.has provided the following details for direct materials purchased on account in different months.
 $$\begin{array} { l l } 
\text { Jan } & \$ 35,000 \
\text { Feb } &28 , 0 0 0  \
\text { March } &3 4 , 0 0 0  \
\text { April } & 3 9 , 0 0 0 \
\text { May } &3 2 , 0 0 0 \
\text { June } &  2 9 , 0 0 0 
\end{array}$$ The terms of payment offered by the suppliers are to pay 70% in the month of purchase and 30% in the following month.Calculate the payments on account made during the first six months.

Accepted Answer

\[\begin{array} { l l l l l l l } 
& \te

Question 9

Cost behavior is considered in developing the selling and administrative expense budget as costs are designated as variable or fixed.

Accepted Answer

A) True 
 B)False

Question 10

All organizations use one standardized budgeting process.

Accepted Answer

A) True 
 B)False

Question 11

The budgeted income statement is a cash-based income statement.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following describes the selling and administrative expenses budget?

Accepted Answer

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

Question 13

Blake Sodas,Inc.has budgeted direct materials inventory purchases as follows: October: $345,000
November: $370,000
December: $440,000
Blake Sodas,Inc.pays for 10% of their purchases during the month of purchase,70% during the month following the purchase,and the remaining 20% two months after the month of purchase.What is the budgeted accounts payable balance on December 31?

Accepted Answer

A)  $396,000 
B)  $470,000 
C)  $440,000 
D)  $433,000 
A)  $396,000 
B)  $470,000 
C)  $440,000 
D)  $433,000

Question 14

Which of the following would not appear on a multiple-step budgeted income statement?

Accepted Answer

A)  
A)  $\text {gross profit }$ 
B)  income tax expense 
C) 
C) $\text {  operating income }$ 
D)  salaries payable 
A)  
A)  $\text {gross profit }$ 
B)  income tax expense 
C) 
C) $\text {  operating income }$ 
D)  salaries payable

Question 15

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.While doing so,the Cash balance can be taken from the ________.

Accepted Answer

A)  operational budget 
B)  budgeted income statement 
C)  cash budget 
D)  sales budget 
A)  operational budget 
B)  budgeted income statement 
C)  cash budget 
D)  sales budget

Question 16

Tortilla Corp.has provided a part of its budget for the second quarter: $$\begin{array} { | l | r | r | r | } 
\hline & \text { Apr } & \text { May } & \text { Jun } \
\hline \text { Cash collections } & \$ 40,000 & \$ 40,000 & \$ 42,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 7,200 & 7,000 & 4,500 \
\hline \text { Operating expenses } & 7,000 & 7,000 & \
\hline \text { Capital expenditures } & 10,000 & 4,000 & 20,000 \
\hline
\end{array}$$ The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of May.

Accepted Answer

A)  $51,800 
B)  $69,800 
C)  $54,000 
D)  $18,000 
A)  $51,800 
B)  $69,800 
C)  $54,000 
D)  $18,000

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Janeway,Inc.has a cash balance of $22,000 on April 1.The company is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: $$\begin{array} { | l | r | r | r | } 
\hline & \text { Apr } & \text { May } & \text { Jun } \
\hline \text { Cash collections } & \$ 26,000 & \$ 26,000 & \$ 24,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 4,000 & 5,300 & 6,200 \
\hline \text { Operating expenses } & 4,600 & 5,000 & 6,000 \
\hline
\end{array}$$ 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 June.

Accepted Answer

A)  $39,400 
B)  $48,000 
C)  $55,100 
D)  $66,900 
A)  $39,400 
B)  $48,000 
C)  $55,100 
D)  $66,900

Question 19

Use of advanced technology makes it more cost effective for managers to conduct sensitivity analysis.

Accepted Answer

A) True 
 B)False

Question 20

A company has prepared the operating budget,the cash budget,and the budgeted income statement and is now preparing the budgeted balance sheet.The balance of Retained Earnings can be taken from the ________.

Accepted Answer

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

The direct materials budget is prepared using information from the ________ budget.

List and describe the three types of budgets that are included in the master budget.

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

The budgeted income statement________.

What is a common method of accessing short-term financing?

When a company is preparing a budgeted statement of cash flows,the payments to suppliers for purchases of direct materials can be obtained from the ________.

Cost behavior is considered in developing the selling and administrative expense budget as costs are designated as variable or fixed.

All organizations use one standardized budgeting process.

The budgeted income statement is a cash-based income statement.

Which of the following describes the selling and administrative expenses budget?

Which of the following would not appear on a multiple-step budgeted income statement?

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.While doing so,the Cash balance can be taken from the ________.

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

Use of advanced technology makes it more cost effective for managers to conduct sensitivity analysis.

A company has prepared the operating budget,the cash budget,and the budgeted income statement and is now preparing the budgeted balance sheet.The balance of Retained Earnings can be taken from the ________.

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

Exam 22: Master Budgets

The direct materials budget is prepared using information from the ________ budget.

List and describe the three types of budgets that are included in the master budget.

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

The budgeted income statement________.

What is a common method of accessing short-term financing?

When a company is preparing a budgeted statement of cash flows,the payments to suppliers for purchases of direct materials can be obtained from the ________.

Cost behavior is considered in developing the selling and administrative expense budget as costs are designated as variable or fixed.

All organizations use one standardized budgeting process.

The budgeted income statement is a cash-based income statement.

Which of the following describes the selling and administrative expenses budget?

Which of the following would not appear on a multiple-step budgeted income statement?

A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.While doing so,the Cash balance can be taken from the ________.

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

Use of advanced technology makes it more cost effective for managers to conduct sensitivity analysis.

A company has prepared the operating budget,the cash budget,and the budgeted income statement and is now preparing the budgeted balance sheet.The balance of Retained Earnings can be taken from the ________.

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