FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Introduction to Budgets and Preparing the Master Budget

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Multiple Choice

Review LaterAdd Note

Review Later

When preparing the budgeted income statement,which of the following is the source for the amount of sales?

A) sales budget
B) purchases budget
C) operating expense budget
D) schedule of cash collections from customers

Correct Answer

verified

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

In a master budget,a capital budget is used to prepare the ________.

A) sales budget
B) budgeted income statement
C) purchases and cost of goods sold budget
D) cash budget

Correct Answer

verified

Show Answer

Question 73

True/False

Review LaterAdd Note

Participative budgeting is the active participation of all affected employees in the formulation of the budget.

Line operating managers usually prepare and use the operating budget.

A spreadsheet can be used to prepare ________.

Which of the following statements is FALSE about a strategic plan?

The first step in preparing the master budget is the preparation of the budgeted income statement.

Which budget guides day-to-day operations in a business?

A decision made during long-range planning includes whether to delete a product from a company's product line.

Activity-based budgets are an example of functional budgeting.

Depreciation expense is usually a disbursement listed on the cash budget.

The beginning available cash balance equals the beginning cash balance plus the minimum cash balance desired.

A budget is an example of an informal business plan.

Paulson Company's expected sales for April are $29,000.Other information follows: $\begin{array}{ll}\text { Budgeted Operating Expenses }&\text { Amount }\\\text { Wages } & \$ 4,000 \\\text { Advertising } & 1,680 \\\text { Depreciation } & 1,440 \\\text { Rent } & 2,560 \\\text { Promotion } & 5 \% \text { of sales }\end{array}$ What are the total expected operating expenses for April?

A major drawback of using historical results for judging current performance is that inefficiencies may be concealed in past performance.

Jensen Company is preparing a cash budget for the month of June.The following information is available: $\begin{array}{ll}\text { Cash Balance, May 31, } 2015 & \$ 10,000 \\\text { Cash collections from customers in June } & 76,000 \\\text { Cash paid for merchandise in June } & 42,000 \\\text { Paid operating expenses in June } & 17,000 \\\text { Purchase furniture for cash in June } & 5,000 \\\text { Depreciation expense in June } & 2,000 \\\text { Amortization expense in June } & 3,000\end{array}$ The minimum cash balance desired is $10,000.What are the net cash receipts and disbursements for the month of June?

A budget is a qualitative expression of a plan of action.

Hoover Company expects June sales to be $30,000.Of these sales,credit sales are expected to be $12,000.Collection of credit sales are 50% in the month of sale,40% in the month following sale and 5% two months following sale.The remaining 5% is uncollectible.________ is the expected cash collection in June from June sales.

A major benefit of effective budgeting is that ________.

What item is NOT a line item on the purchases and cost of goods sold budget?