Question 1

Select the correct statement.

Accepted Answer

A)  Four purposes often claimed for budgeting involve planning, coordination, performance measurement, and reporting. 
B)  In a participative budgeting system, budget information flows in one direction only, from bottom to top. 
C)  The three major categories of the master budget are operating budgets, capital budgets, and pro forma financial statements. 
D)  The accounting department normally coordinates the development of the sales forecast. 
A)  Four purposes often claimed for budgeting involve planning, coordination, performance measurement, and reporting. 
B)  In a participative budgeting system, budget information flows in one direction only, from bottom to top. 
C)  The three major categories of the master budget are operating budgets, capital budgets, and pro forma financial statements. 
D)  The accounting department normally coordinates the development of the sales forecast.

Question 2

Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% each month. How many units will need to be purchased in February if the company's policy is to keep ending inventory each month at 10,000 units?

Accepted Answer

A)  52,000 units 
B)  54,000 units 
C)  62,000 units 
D)  None of these answers is correct. 
A)  52,000 units 
B)  54,000 units 
C)  62,000 units 
D)  None of these answers is correct.

Question 3

The cash budget is not the same as the pro forma cash flow statement.

Accepted Answer

A) True 
 B)False

Question 4

Why is cash management important to a business?

Accepted Answer

Cash management is important because a b

Question 5

Which of the following is generally included in a sales budget?

Accepted Answer

A)  Schedule of cash receipts for the projected sales 
B)  Desired ending inventory 
C)  Budgeted cost of goods sold 
D)  Schedule of cash payments for inventory purchases 
A)  Schedule of cash receipts for the projected sales 
B)  Desired ending inventory 
C)  Budgeted cost of goods sold 
D)  Schedule of cash payments for inventory purchases

Question 6

A management accountant was working on a cash budget for Oklahoma Company when he accidentally spilled his coffee. Some of the liquid splattered on his working papers rendering a few of the amounts illegible. The budget with missing amounts indicated is provided below:   
The company desires a cash cushion of $7,500 to start each month. In any month in which there is cash shortage the company's bank will extend it a loan equal to the shortage amount. The loan is assumed to have been made on the last day of the month. Any time the company has a cash surplus it must repay as much of any outstanding loans as possible. The bank charges monthly interest of 1% on any outstanding loan balance.
Required:
Compute the missing amounts and enter them in the following table: $$\begin{array} { | l | l | l |l |} 
\hline \text { (a) }  && ( i )& \
\hline \text { (b) }  && ( j )  \
\hline \text { (c) } && \text { (k) }  \
\hline \text { (d) } && \text { (l) }  \
\hline \text { (e) } && \text { (m) }  \
\hline \text { (f) } && \text { (n) }  \
\hline \text { (g) } && \text { (o) }  \
\hline \text { (h) } &&  \text { (p) }  \
\hline
\end{array}$$

Accepted Answer

The answer of A management accountant was working on a...

Question 7

One advantage of participatory budgeting is that it frees up upper management for more important tasks.

Accepted Answer

A) True 
 B)False

Question 8

Tableware Unlimited Company plans to sell china and other dining-related items over the internet. The company plans to begin business on January 1, 2014. The company's accountant has prepared the following sales budget for the first quarter of 2014:   
In anticipation of preparing a cash budget, the accountant needs to compute the expected monthly cash collections. Because the company is new and has no collection experience of its own, the accountant contacted an industry trade group and obtained the following industry collection data:
Collections on account
70% in the month of sale
20% in the month following sale
6% in the second month following sale
Uncollectible accounts have averaged 4% of receivables. The company gives a 2% discount for payments made by customers during the month of sale.
Required:
Prepare a schedule of cash collections from sales by month and in total for the first quarter.

Accepted Answer

Schedule of cash collections: @#IMG-DLM& Computati

Question 9

Select the incorrect statement about the planning process.

Accepted Answer

A)  The longer the time period, the more specific the plans. 
B)  Planning decisions can often be sub-divided into three distinct planning phases, short-term, intermediate-term, and long-term. 
C)  The nature of planning changes with the length of the time period being considered. 
D)  The shorter the time period, the less general the plans. 
A)  The longer the time period, the more specific the plans. 
B)  Planning decisions can often be sub-divided into three distinct planning phases, short-term, intermediate-term, and long-term. 
C)  The nature of planning changes with the length of the time period being considered. 
D)  The shorter the time period, the less general the plans.

Select the correct statement.

Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% each month. How many units will need to be purchased in February if the company's policy is to keep ending inventory each month at 10,000 units?

The cash budget is not the same as the pro forma cash flow statement.

Why is cash management important to a business?

Which of the following is generally included in a sales budget?

One advantage of participatory budgeting is that it frees up upper management for more important tasks.

Select the incorrect statement about the planning process.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Performance Evaluation

Planning for Capital Investments

Filters

Exam 14: Planning for Profit and Cost Control

Select the correct statement.

Sales for January are budgeted at 50,000 units, and the company expects sales to increase 4% each month. How many units will need to be purchased in February if the company's policy is to keep ending inventory each month at 10,000 units?

The cash budget is not the same as the pro forma cash flow statement.

Why is cash management important to a business?

Which of the following is generally included in a sales budget?

One advantage of participatory budgeting is that it frees up upper management for more important tasks.

Select the incorrect statement about the planning process.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Performance Evaluation

Planning for Capital Investments

Filters