Question 1

The budgeting process ________.

Accepted Answer

A) usually begins about one month before the beginning of the budget period to allow for more current information to be considered 
B) does not need input from all levels because it is the role of management to control costs and meet revenue goals 
C) requires significant coordination among the company's various business segments 
D) is standard among all types of companies 
A) usually begins about one month before the beginning of the budget period to allow for more current information to be considered 
B) does not need input from all levels because it is the role of management to control costs and meet revenue goals 
C) requires significant coordination among the company's various business segments 
D) is standard among all types of companies

Question 2

List the budgets that are affected by the budgeted number of units to be produced.

Accepted Answer

1.Production budget
2.Direct m

Question 3

Chatelain Company is preparing its budget for the third quarter.The cash balance on June 30 was $32,000.Additional budgeted data are provided here:
 
What amount should be shown in the cash budget for the cash balance at the end of July?

Accepted Answer

A) $19,000 
B) $35,000 
C) $105,000 
D) $86,000 
A) $19,000 
B) $35,000 
C) $105,000 
D) $86,000

Question 4

Diemans Corp.has provided a part of its budget for the second quarter:
 
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 April.

Accepted Answer

A) $67,900 
B) $54,000 
C) $21,000 
D) $41,000 
A) $67,900 
B) $54,000 
C) $21,000 
D) $41,000

Question 5

To develop the cost of goods sold budget,it is necessary to start by calculating the projected cost to produce each unit.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements regarding capital expenditures is incorrect?

Accepted Answer

A) Capital expenditures are purchases of long-term assets. 
B) The decision to purchase long-term assets is part of a strategic plan. 
C) Capital expenditures include delivery trucks,computer systems,and manufacturing equipment. 
D) Installment payments related to the purchase of long-term assets are included in the capital expenditures budget. 
A) Capital expenditures are purchases of long-term assets. 
B) The decision to purchase long-term assets is part of a strategic plan. 
C) Capital expenditures include delivery trucks,computer systems,and manufacturing equipment. 
D) Installment payments related to the purchase of long-term assets are included in the capital expenditures budget.

Question 7

The personnel manager projects direct labor costs.

Accepted Answer

A) True 
 B)False

Question 8

When preparing the budgeted balance sheet of a merchandising company,the amount of Merchandise Inventory can be obtained from the ________.

Accepted Answer

A) merchandise inventory account 
B) inventory,purchases,and cost of goods sold budget 
C) production budget 
D) capital expenditure budget and cash budget 
A) merchandise inventory account 
B) inventory,purchases,and cost of goods sold budget 
C) production budget 
D) capital expenditure budget and cash budget

Question 9

An intentional understatement of expected revenues or overstatement of expected expenses by managers in order to have a favorable performance evaluation is known as ________.

Accepted Answer

A) benchmarking 
B) appropriation 
C) budgetary slack 
D) variance analysis 
A) benchmarking 
B) appropriation 
C) budgetary slack 
D) variance analysis

Question 10

Which of the following is an example of the benchmarking function of the budgeting process?

Accepted Answer

A) A budget demands integrated input from different business units and functions. 
B) Budgeting requires close cooperation between accountants and operational personnel. 
C) Budget figures are used to evaluate the performance of managers. 
D) The budget outlines a specific course of action for the coming period. 
A) A budget demands integrated input from different business units and functions. 
B) Budgeting requires close cooperation between accountants and operational personnel. 
C) Budget figures are used to evaluate the performance of managers. 
D) The budget outlines a specific course of action for the coming period.

Question 11

Americana Company is preparing its budget for the third quarter.Cash balance on July 31 was $32,000.Assume there is no minimum balance of cash required and no borrowing is undertaken.Additional budgeted data are provided here:
 
Calculate the projected balance of cash at the end of August.

Accepted Answer

A) $23,000 
B) $109,000 
C) $38,000 
D) $31,000 
A) $23,000 
B) $109,000 
C) $38,000 
D) $31,000

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

When preparing the cost of goods sold budget,________.

Accepted Answer

A) ignore balances in Finished Goods Inventory 
B) start by calculating the projected cost to produce each unit 
C) ignore the inventory costing method 
D) multiply units produced by the total projected cost per unit 
A) ignore balances in Finished Goods Inventory 
B) start by calculating the projected cost to produce each unit 
C) ignore the inventory costing method 
D) multiply units produced by the total projected cost per unit

Question 14

Which of the following is true of the sales budget?

Accepted Answer

A) It provides sales data that is used to prepare financial statements for external reporting purposes. 
B) It captures the variable and fixed expenses of the business. 
C) It is used in the production budget. 
D) It shows the cost of expected production in a period. 
A) It provides sales data that is used to prepare financial statements for external reporting purposes. 
B) It captures the variable and fixed expenses of the business. 
C) It is used in the production budget. 
D) It shows the cost of expected production in a period.

Question 15

Flamingo,Inc.has the following budgeted figures:
 
Calculate cost of goods sold for the month of February.

Accepted Answer

A) $15,000 
B) $34,500 
C) $42,000 
D) $36,000 
A) $15,000 
B) $34,500 
C) $42,000 
D) $36,000

Question 16

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 17

If the cost of indirect materials needed for production is insignificant,it should not be included in the budgeting process.

Accepted Answer

A) True 
 B)False

Question 18

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 19

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

Accepted Answer

Securing a line of credit with

Question 20

All of the information that is needed to prepare the budgeted statement of cash flows comes from the budgeted income statement.

Accepted Answer

A) True 
 B)False

Exam 22: Master Budgets

The budgeting process ________.

List the budgets that are affected by the budgeted number of units to be produced.

Chatelain Company is preparing its budget for the third quarter.The cash balance on June 30 was $32,000.Additional budgeted data are provided here: What amount should be shown in the cash budget for the cash balance at the end of July?

Diemans Corp.has provided a part of its budget for the second quarter: 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 April.

To develop the cost of goods sold budget,it is necessary to start by calculating the projected cost to produce each unit.

Which of the following statements regarding capital expenditures is incorrect?

The personnel manager projects direct labor costs.

When preparing the budgeted balance sheet of a merchandising company,the amount of Merchandise Inventory can be obtained from the ________.

An intentional understatement of expected revenues or overstatement of expected expenses by managers in order to have a favorable performance evaluation is known as ________.

Which of the following is an example of the benchmarking function of the budgeting process?

Americana Company is preparing its budget for the third quarter.Cash balance on July 31 was $32,000.Assume there is no minimum balance of cash required and no borrowing is undertaken.Additional budgeted data are provided here: Calculate the projected balance of cash at the end of August.

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

When preparing the cost of goods sold budget,________.

Which of the following is true of the sales budget?

Flamingo,Inc.has the following budgeted figures: Calculate cost of goods sold for the month of February.

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

If the cost of indirect materials needed for production is insignificant,it should not be included in the budgeting process.

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

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

All of the information that is needed to prepare the budgeted statement of cash flows comes from the budgeted income statement.

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