accounting 8
A company with adequate cash balances at the beginning and end of the year:
may still have cash deficiency issues during the year
The amount of goods for resale to be purchased from suppliers during the period is shown on the
merchandise purchase budget
Using a budget to blame or pressure employees to do a better job leads to:
mistrust
A perpetual budget keeps managers focused at least one year ahead by adding one:
month to the end of the budget as each month comes to a close
Budget two purpose
planning control
self-imposed limitations
thoughts and feelings that are barriers to personal well-being. -walls that keep us confined mentally and emotionally.
Planning
involves developing goals and preparing various budgets to achieve those goals
Control
involves gathering feedback to ensure that the plan is being properly executed
A number of separate but interdependent budgets that formally lay out a company's sales, production, and financial goals is contained in the
master budget
Budgeted expenses for areas other than manufacturing are shown on the ______ budget.
selling and administrative
Advantages of Budgets
1. communicating 2. planning 3. define goals and objectives that can serve as benchmarks for evaluating subsequent performance 4. force managers to think about and plan for the future 5.coordinate the activities of the entire organization by integrating the plans of its various parts 6. and the budgeting process can uncover potential bottlenecks before they occur
Self-imposed budget (participative budget)
A method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by higher-level managers, and any issues are resolved by mutual agreement.
Responsibility Accounting
A system of accountability in which managers are held responsible for those items of revenue and cost—and only those items—over which they can exert significant control. The managers are held responsible for differences between budgeted and actual results.
All costs of production other than direct materials and direct labor are shown on the
All costs of production other than direct materials and direct labor are shown on the
Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured?
Budgeted income statement
On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency?
Cash disbursements
True or false: For most companies a single, annual cash budget is sufficient.
False
Which of the following budgets are directly based on information from the sales budget
Production budget Selling and administrative expense budget
Which of the following is needed to prepare a sales budget
The budgeted number of units to be sold
Which of the following is needed to prepare a sales budget?
The budgeted number of units to be sold
budget slack
The influence of behavior to "pad" a budget via misstating expected revenues and/or expenses; to create more favorable budget vs. actual performance appraisals
imposed budget
a budget developed by top management with little or no input from operating personnel; operating personnel are then informed of the budget objectives and constraints
the annual master budget file includes the ________ from last year because it is needed for the schedule of expected cash collections.
balance sheet
To prepare a budgeted balance sheet as of December 31, 2016, data is needed from the:
balance sheet as of December 31, 2015
A budgeted balance sheet is developed using data from the ______ of the budget period and data contained in the various schedules.
beginning
The ending finished goods inventory budget computes the
cost of unsold units
True or false: The definition of responsibility accounting states that senior management is directly responsible for every decision made by lower level managers.
false
The cash budget includes four major sections
receipts, disbursements, the cash excess or deficiency, and financing
The first step in the budgeting process is preparing the
sales budget
To calculate total sales on the sales budget, multiply budgeted sales in units by:
sales price per unit
More accurate estimates and higher motivation are generally the result of using a
self-imposed budget