Question 1

The five primary purposes of a budget are:

Accepted Answer

A)  planning, allocating resources; facilitating communication and coordination; controlling profit and operations; evaluating performance and providing incentives. 
B)  planning; allocating resources; facilitating communication and coordination; controlling profit and operations; and allocating overhead costs. 
C)  planning; allocating resources; facilitating communication and coordination; controlling profit and operations; and evaluating competition. 
D)  planning; allocating resources; controlling profit and operations; providing incentives; evaluating performance; and allocating overhead costs. 
A)  planning, allocating resources; facilitating communication and coordination; controlling profit and operations; evaluating performance and providing incentives. 
B)  planning; allocating resources; facilitating communication and coordination; controlling profit and operations; and allocating overhead costs. 
C)  planning; allocating resources; facilitating communication and coordination; controlling profit and operations; and evaluating competition. 
D)  planning; allocating resources; controlling profit and operations; providing incentives; evaluating performance; and allocating overhead costs.

Question 2

Which of the following involves decisions about the types of businesses and markets that an organisation operates in, and about how those businesses and activities will be financed?

Accepted Answer

A)  Sales forecasting 
B)  Strategic planning 
C)  Financial statement forecasting 
D)  Financial planning 
A)  Sales forecasting 
B)  Strategic planning 
C)  Financial statement forecasting 
D)  Financial planning

Question 3

A cash budget

Accepted Answer

A)  is appropriate for a business in any industry. 
B)  shows expected cash receipts and planned payments. 
C)  shows expected sales and planned expenses. 
D)  is appropriate for a business in any industry AND shows expected cash receipts and planned payments. 
A)  is appropriate for a business in any industry. 
B)  shows expected cash receipts and planned payments. 
C)  shows expected sales and planned expenses. 
D)  is appropriate for a business in any industry AND shows expected cash receipts and planned payments.

Question 4

Budgeted sales for ABC Company are as follows:  
All stock is marked up to sell at its invoice cost plus 25 per cent. On average 60 per cent of credit sales are collected in the month of sale, 35 per cent in the month following sale and the remainder is uncollectible. Budgeted total cash receipts for November are:

Accepted Answer

A)  $1 675 000 
B)  $1 875 000 
C)  $1 280 000 
D)  None of the given answers 
A)  $1 675 000 
B)  $1 875 000 
C)  $1 280 000 
D)  None of the given answers

Question 5

Sales of 50 000 finished products are budgeted for Tracey Company. Four kilograms of direct material are required for each finished unit. Actual beginning and desired ending inventories of direct material and finished goods are as follows.  
All products are finished at the end of the period, so there is no work in process at the beginning and end of the period. How many kilograms of direct material is the company planning to purchase?

Accepted Answer

A)  218 000 
B)  214 000 
C)  186 000 
D)  184 000 
A)  218 000 
B)  214 000 
C)  186 000 
D)  184 000

Question 6

Past sales levels and trends, general economic trends, and political and legal events are all used for

Accepted Answer

A)  sales forecasting. 
B)  resource allocation. 
C)  financial budgets. 
D)  resource budgets. 
A)  sales forecasting. 
B)  resource allocation. 
C)  financial budgets. 
D)  resource budgets.

Question 7

Consider the following statements about zero-base budgeting.
i. The budget for virtually every activity in an organisation is initially set to the level that existed during the previous year.
ii. The budget helps identify areas of waste and redundant activities.
iii. The budget must be justified in terms of its continued usefulness.
Which statement/s is/are true?

Accepted Answer

A)  i, ii and iii 
B)  i and ii 
C)  ii and iii 
D)  iii 
A)  i, ii and iii 
B)  i and ii 
C)  ii and iii 
D)  iii

Question 8

A manufacturer prepares a production budget. The comparable budget for a retail or wholesale business would be a budget for

Accepted Answer

A)  sales. 
B)  purchases. 
C)  direct materials. 
D)  direct labour. 
A)  sales. 
B)  purchases. 
C)  direct materials. 
D)  direct labour.

Question 9

Managers can window dress their performance by creating budgetary slack. Explain why a manager would do this and support your answer with three examples.

Accepted Answer

There are three primary reasons why peop

Question 10

Which of the following budgets is usually prepared at the start of the budgeting process?

Accepted Answer

A)  Production budget 
B)  Annual budget 
C)  Operating budget 
D)  Sales budget 
A)  Production budget 
B)  Annual budget 
C)  Operating budget 
D)  Sales budget

Question 11

The usual order of steps in preparing a budget is

Accepted Answer

A)  production budget, sales budget, budgeted income statement. 
B)  sales budget, production budget, budgeted income statement. 
C)  budgeted income statement, production budget, sales budget. 
D)  budgeted income statement, sales budget, production budget. 
A)  production budget, sales budget, budgeted income statement. 
B)  sales budget, production budget, budgeted income statement. 
C)  budgeted income statement, production budget, sales budget. 
D)  budgeted income statement, sales budget, production budget.

Question 12

Which of the following includes the cash receipts and cash payments and discloses a firm's financial plans?

Accepted Answer

A)  Cash budget 
B)  Selling and administrative expense budget 
C)  Budgeted financial statement 
D)  None of the given answers 
A)  Cash budget 
B)  Selling and administrative expense budget 
C)  Budgeted financial statement 
D)  None of the given answers

The five primary purposes of a budget are:

Which of the following involves decisions about the types of businesses and markets that an organisation operates in, and about how those businesses and activities will be financed?

A cash budget

Past sales levels and trends, general economic trends, and political and legal events are all used for

A manufacturer prepares a production budget. The comparable budget for a retail or wholesale business would be a budget for

Managers can window dress their performance by creating budgetary slack. Explain why a manager would do this and support your answer with three examples.

Which of the following budgets is usually prepared at the start of the budgeting process?

The usual order of steps in preparing a budget is

Which of the following includes the cash receipts and cash payments and discloses a firm's financial plans?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

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Exam 9: Budgeting Systems

The five primary purposes of a budget are:

Which of the following involves decisions about the types of businesses and markets that an organisation operates in, and about how those businesses and activities will be financed?

A cash budget

Past sales levels and trends, general economic trends, and political and legal events are all used for

A manufacturer prepares a production budget. The comparable budget for a retail or wholesale business would be a budget for

Managers can window dress their performance by creating budgetary slack. Explain why a manager would do this and support your answer with three examples.

Which of the following budgets is usually prepared at the start of the budgeting process?

The usual order of steps in preparing a budget is

Which of the following includes the cash receipts and cash payments and discloses a firm's financial plans?

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Product Costing Systems

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters