Question 1

An objective of the budgeting process is to communicate a single,unified,comprehensive plan for the business.

Accepted Answer

A) True 
 B)False

Question 2

A company with different segments using different software configurations can easily combine budget data of different segments to create the master budget.

Accepted Answer

A) True 
 B)False

Question 3

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

Accepted Answer

A) True 
 B)False

Question 4

A type of operational budget that involves adding one additional month to the budget as each month goes by is called a ________.

Accepted Answer

A)  monthly replacement budget 
B)  long-term goal budget 
C)  static budget 
D)  continuous budget 
A)  monthly replacement budget 
B)  long-term goal budget 
C)  static budget 
D)  continuous budget

Question 5

List the three sections of the cash budget for a merchandising company.

Accepted Answer

@#LAT-DLM& 2.Cash pa

Question 6

A budgeting process where individuals who are impacted by a budget are directly involved in its development is called ________.

Accepted Answer

A)  flexible budgeting 
B)  benefit budgeting 
C)  participative budgeting 
D)  cooperative budgeting 
A)  flexible budgeting 
B)  benefit budgeting 
C)  participative budgeting 
D)  cooperative budgeting

Question 7

Budgeting software is often designed as a component of the company's Enterprise Resource Planning (ERP)system.

Accepted Answer

A) True 
 B)False

Question 8

The forecast of sales revenue is the cornerstone of the master budget.

Accepted Answer

A) True 
 B)False

Question 9

A manufacturing company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.The balance of Finished Goods Inventory can be taken from the ________.

Accepted Answer

A)  production budget and cost of goods sold budget 
B)  financial budget 
C)  cash budget 
D)  selling and administrative expenses budget 
A)  production budget and cost of goods sold budget 
B)  financial budget 
C)  cash budget 
D)  selling and administrative expenses budget

Question 10

Which of the following would not appear on the selling and administrative budget of O'dell Company?

Accepted Answer

A)  Rent Expense 
B)  Depreciation Expense 
C)  Salaries Expense 
D)  Indirect Labor 
A)  Rent Expense 
B)  Depreciation Expense 
C)  Salaries Expense 
D)  Indirect Labor

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Budgeting requires managers to develop overall business goals and budget for specific actions to achieve the goals.

Accepted Answer

A) True 
 B)False

Question 13

Regarding the sales budget,which of the following statements is incorrect?

Accepted Answer

A)  The forecast of sales revenue is the cornerstone of the master budget. 
B)  The level of sales affects expenses and almost all other elements of the master budget. 
C)  The budgeted sales are carried from the sales budget to the balance sheet. 
D)  Budgeted total sales for each product equal the sales price multiplied by the expected number of units sold. 
A)  The forecast of sales revenue is the cornerstone of the master budget. 
B)  The level of sales affects expenses and almost all other elements of the master budget. 
C)  The budgeted sales are carried from the sales budget to the balance sheet. 
D)  Budgeted total sales for each product equal the sales price multiplied by the expected number of units sold.

Question 14

Which of the following describes the production budget?

Accepted Answer

A)  It aids in planning to ensure the company has adequate inventory and cash on hand. 
B)  It provides the quantity of finished goods to be produced during a budget period. 
C)  It depicts the breakdown of sales on the basis of terms and conditions of collection of sales revenue. 
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 provides the quantity of finished goods to be produced during a budget period. 
C)  It depicts the breakdown of sales on the basis of terms and conditions of collection of sales revenue. 
D)  It helps in planning to ensure the business has adequate cash.

Question 15

Mimosa,Inc.,a merchandising company,has the following budgeted figures: $$\begin{array} { | l | l | c | c | c | } 
\hline & { \text { Jan } } & \text { Feb } & \text { Mar } & \text { April } \
\hline \text { Sales } & { \$ 50,200 } & \$ 67,000 & \$ 84,000 & \$ 95,000 \
\hline \text { Cost of goods sold } & 60 \% \text { of sales } & & & \
\hline \text { Required ending inventory } & \begin{array} { l } 
\$ 10,000 + 25 \% \text { of next } \
\text { month's sales }
\end{array} & & & \
\hline \text { Inventory on hand on Jan 1 } & { \$ 27,500 } & & & \
\hline
\end{array}$$ Calculate cost of goods sold for the month of February.

Accepted Answer

A)  $16,750 
B)  $30,120 
C)  $29,370 
D)  $40,200 
A)  $16,750 
B)  $30,120 
C)  $29,370 
D)  $40,200

Question 16

Which of the following is NOT a benefit of benchmarking?

Accepted Answer

A)  It helps companies determine where they can improve. 
B)  It does not help management highlight company problems. 
C)  It can be used to compare a company's budgets to other leading companies through the use of industry averages. 
D)  It helps companies develop budgets to assist in meeting performance goals. 
A)  It helps companies determine where they can improve. 
B)  It does not help management highlight company problems. 
C)  It can be used to compare a company's budgets to other leading companies through the use of industry averages. 
D)  It helps companies develop budgets to assist in meeting performance goals.

Question 17

There is no need for managers to have employees participate in developing the budget because the budget is a management tool.

Accepted Answer

A) True 
 B)False

Question 18

When preparing the budgeted income statement of a merchandising company,the amount of cost of goods sold can be taken from the ________.

Accepted Answer

A)  budgeted balance sheet 
B)  cost of goods sold budget 
C)  inventory, purchases, and cost of goods sold budget 
D)  capital expenditures budget 
A)  budgeted balance sheet 
B)  cost of goods sold budget 
C)  inventory, purchases, and cost of goods sold budget 
D)  capital expenditures budget

Question 19

After comparing budgets with the actual results,the feedback allows managers to determine what,if any,corrective action should be taken.

Accepted Answer

A) True 
 B)False

Question 20

For a merchandising company,the selling and administrative expense budget separates fixed and variable expenses.

Accepted Answer

A) True 
 B)False

Exam 22: Master Budgets

An objective of the budgeting process is to communicate a single,unified,comprehensive plan for the business.

A company with different segments using different software configurations can easily combine budget data of different segments to create the master budget.

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

A type of operational budget that involves adding one additional month to the budget as each month goes by is called a ________.

List the three sections of the cash budget for a merchandising company.

A budgeting process where individuals who are impacted by a budget are directly involved in its development is called ________.

Budgeting software is often designed as a component of the company's Enterprise Resource Planning (ERP)system.

The forecast of sales revenue is the cornerstone of the master budget.

A manufacturing company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.The balance of Finished Goods Inventory can be taken from the ________.

Which of the following would not appear on the selling and administrative budget of O'dell Company?

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

Budgeting requires managers to develop overall business goals and budget for specific actions to achieve the goals.

Regarding the sales budget,which of the following statements is incorrect?

Which of the following describes the production budget?

Which of the following is NOT a benefit of benchmarking?

There is no need for managers to have employees participate in developing the budget because the budget is a management tool.

When preparing the budgeted income statement of a merchandising company,the amount of cost of goods sold can be taken from the ________.

After comparing budgets with the actual results,the feedback allows managers to determine what,if any,corrective action should be taken.

For a merchandising company,the selling and administrative expense budget separates fixed and variable expenses.

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

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