Question 1

The budgeted balance sheet is prepared from data contained in the previously prepared components of the master budget.

Accepted Answer

A) True 
 B)False

Question 2

A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible. Projected sales for December, January, and February are $60,000, $85,000 and $95,000, respectively. The February expected cash receipts from all current and prior credit sales is:

Accepted Answer

A)  $57,000 
B)  $61,200 
C)  $66,400 
D)  $80,750 
E)  $90,250 
A)  $57,000 
B)  $61,200 
C)  $66,400 
D)  $80,750 
E)  $90,250

Question 3

Harold's expects its September sales to be 20% higher than its August sales of $150,000. Purchases were $100,000 in August and are expected to be $120,000 in September. All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month. The beginning cash balance on September 1 is $7,500. The ending cash balance on September 30 would be:

Accepted Answer

A)  $31,500. 
B)  $67,500. 
C)  $54,000. 
D)  $61,500. 
E)  $136,500. 
A)  $31,500. 
B)  $67,500. 
C)  $54,000. 
D)  $61,500. 
E)  $136,500.

Question 4

Miles Company is preparing a cash budget for February. The company has $30,000 cash at the beginning of February and anticipates $75,000 in cash receipts and $96,250 in cash disbursements during February. Miles Company has an agreement with its bank to maintain a cash balance of $10,000. What amount, if any, must the company borrow during February to maintain a $10,000 cash balance?

Accepted Answer

The answer of Miles Company is preparing a cash budget...

Question 5

What is a manufacturing budget?

Accepted Answer

A manufacturing budget shows t

Question 6

Assuming a bottom-up process of budget development, which of the following should be initially responsible for developing sales estimates?

Accepted Answer

A)  The budget committee. 
B)  The accounting department. 
C)  The sales department. 
D)  Top management. 
E)  The marketing department. 
A)  The budget committee. 
B)  The accounting department. 
C)  The sales department. 
D)  Top management. 
E)  The marketing department.

Question 7

A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units. Total June sales are anticipated to be:

Accepted Answer

A)  $63,000. 
B)  $67,500. 
C)  $61,250. 
D)  $74,250. 
E)  $60,000. 
A)  $63,000. 
B)  $67,500. 
C)  $61,250. 
D)  $74,250. 
E)  $60,000.

Question 8

The master budget process nearly always begins with the preparation of the ___________________ and usually finishes with the preparation of the _____________________, the _______________, and the _____________________.

Accepted Answer

Sales Budget; Cash B

Question 9

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

Accepted Answer

A)  $860 
B)  $1,100 
C)  $1,960 
D)  $9,160 
E)  $11,360 
A)  $860 
B)  $1,100 
C)  $1,960 
D)  $9,160 
E)  $11,360

Question 10

Kyoto, Inc. predicts the following sales in units for the coming four months:
Although each month's ending inventory of finished units should be 60% of the next month's sales, the March 31 finished goods inventory is only 100 units. A finished unit requires five pounds of raw material B. The March 31 raw materials inventory has 200 pounds of B. Each month's ending inventory of raw materials should be 30% of the following month's production needs. The budgeted production for May is:

Accepted Answer

A)  200 units. 
B)  212 units. 
C)  268 units. 
D)  280 units. 
E)  292 units. 
A)  200 units. 
B)  212 units. 
C)  268 units. 
D)  280 units. 
E)  292 units.

Question 11

Airtex Company budgeted the following credit sales during the current year: September, $90,000; October, $123,000; November, $105,000; December, $111,000. Experience has shown that cash from credit sales is received as follows: 10% in the month of sale, 50% in the first month after sale, 35% in the second month after sale, and 5% is uncollectible. How much cash should Airtex Company expect to collect in November from all current and past credit sales?

Accepted Answer

The answer of Airtex Company budgeted the following credit sales...

Question 12

A formal statement of future plans, usually expressed in monetary terms, is a:

Accepted Answer

A)  Variance report. 
B)  Position statement. 
C)  Budget. 
D)  Prospectus. 
E)  Variance analysis. 
A)  Variance report. 
B)  Position statement. 
C)  Budget. 
D)  Prospectus. 
E)  Variance analysis.

Question 13

A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:

Accepted Answer

A)  Selling expenses budget. 
B)  Merchandise purchases budget. 
C)  Sales budget. 
D)  Cash budget. 
E)  Capital expenditures budget. 
A)  Selling expenses budget. 
B)  Merchandise purchases budget. 
C)  Sales budget. 
D)  Cash budget. 
E)  Capital expenditures budget.

Question 14

Grafton budgets production of 300 units in June and 310 units in July. Each finished unit requires 4 pounds of raw material K, which costs $5 per pound. Each month's ending inventory of raw materials should be 30% of the following month's budgeted production. The June 1 raw materials inventory has 360 pounds of raw material K. Compute budgeted purchases for raw material K for June.

Accepted Answer

A)  1,200 lbs. 
B)  1,240 lbs. 
C)  1,212 lbs. 
D)  1,220 lbs. 
E)  880 lbs. 
A)  1,200 lbs. 
B)  1,240 lbs. 
C)  1,212 lbs. 
D)  1,220 lbs. 
E)  880 lbs.

Question 15

Budgets are normally more effective when all levels of management are involved in the budgeting process.

Accepted Answer

A) True 
 B)False

Question 16

A sporting goods store budgeted August purchases of ski jackets at $140,000. The store had ski jackets costing $12,000 in its inventory at the beginning of August; and to cover part of anticipated September sales, they expect to have $25,000 of ski jackets in inventory at the end of the month of August. What is the budgeted cost of goods sold for August?

Accepted Answer

The answer of A sporting goods store budgeted August purchases...

Question 17

In preparing a budget for the last three months of the current year, Urban Company is planning the units of merchandise it must order each month. The company's policy is to have 15% of the next month's sales in its inventory at the end of each month. Projected sales for October, November, and December are 27,000 units, 29,500 units, and 32,500 units, respectively. How many units must be ordered in November?

Accepted Answer

The answer of In preparing a budget for the last...

Question 18

A capital expenditures budget is prepared before the operating budgets.

Accepted Answer

A) True 
 B)False

Question 19

Grafton is preparing a cash budget for June. The company has $25,000 cash at the beginning of June and anticipates $95,000 in cash receipts and $111,290 in cash disbursements during June. Compute the amount the company must borrow, if any, to maintain a $20,000 cash balance. The company has no loans outstanding on June 1.

Accepted Answer

A)  $28,710. 
B)  $12,290. 
C)  $16,290. 
D)  $11,290 
E)  $6,290. 
A)  $28,710. 
B)  $12,290. 
C)  $16,290. 
D)  $11,290 
E)  $6,290.

Question 20

Which of the following statements about budgeting is ?

Accepted Answer

A)  Budgeting is an aid to planning and control. 
B)  Budgets create standards for performance evaluation. 
C)  Budgets help coordinate the activities of the entire organization. 
D)  Budgeting forces managers to think ahead and formalize long-range objectives. 
E)  The master budget should only be prepared by top management. 
A)  Budgeting is an aid to planning and control. 
B)  Budgets create standards for performance evaluation. 
C)  Budgets help coordinate the activities of the entire organization. 
D)  Budgeting forces managers to think ahead and formalize long-range objectives. 
E)  The master budget should only be prepared by top management.

The budgeted balance sheet is prepared from data contained in the previously prepared components of the master budget.

What is a manufacturing budget?

Assuming a bottom-up process of budget development, which of the following should be initially responsible for developing sales estimates?

A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units. Total June sales are anticipated to be:

The master budget process nearly always begins with the preparation of the _______ and usually finishes with the preparation of the _, the _, and the _______________.

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

A formal statement of future plans, usually expressed in monetary terms, is a:

A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:

Budgets are normally more effective when all levels of management are involved in the budgeting process.

A capital expenditures budget is prepared before the operating budgets.

Which of the following statements about budgeting is ?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

Exam 23: Master Budgets and Planning

The budgeted balance sheet is prepared from data contained in the previously prepared components of the master budget.

What is a manufacturing budget?

Assuming a bottom-up process of budget development, which of the following should be initially responsible for developing sales estimates?

A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units. Total June sales are anticipated to be:

The master budget process nearly always begins with the preparation of the ___________________ and usually finishes with the preparation of the _____________________, the _______________, and the _____________________.

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

A formal statement of future plans, usually expressed in monetary terms, is a:

A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:

Budgets are normally more effective when all levels of management are involved in the budgeting process.

A capital expenditures budget is prepared before the operating budgets.

Which of the following statements about budgeting is ?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

The master budget process nearly always begins with the preparation of the _______ and usually finishes with the preparation of the _, the _, and the _______________.