Accounting exam 3 practice

Sales Budget is used to prepare

A schedule of Expected Cash collections

Expected cash collections

Arrives from Current & Prior sales

Sales Revenue=

Budgeted unit sales x Unit Selling Price

Which of the following explains why operating budgets generally span a period of one year?

Companies choose a span of one year to correspond to their fiscal years.

Self-imposed budget has 2 important limitations.

Lower-level Managers: Suboptimal budgeting estimates Budgetary Slack

Which of the following is not a benefit of self-imposed budgets?

Lower-level managers are encouraged to create budgetary slack since they are more knowledgeable of day-today operations.

The budgeting process begins with the preparation of the blank budget.

Sales

which of the following is not one of the reasons that organizations use budgets?

The budgeting process enables managers to uncover bottlenecks as they occur.

Cash budget

cash budget is the cash T-accounts.

Control

compare budgets to actual results to improve the efficiency and effectiveness. Evaluate and reward employees.

Two Key Budget Insights

the budget is designed to answer 10 key questions. The budget is based on various elements and assumptions.