Chapter 8 : text book Questions

A detailed plan for the future that is usually expressed in formal quantitative terms is Blank______. Multiple choice question. responsibility accounting Reason: Responsibility accounting is the idea that a manager should be held responsible for only those items they can actually control. the budget period Reason: The budget period is the length of time a budget should cover. profit planning Reason: Profit planning is a process used by businesses to achieve their planned levels of profits by preparing a number of budgets that together form an integrated business plan known as the master budget. a budget

a budget

The final schedule of the master budget is the Blank______. Multiple choice question. cash budget budgeted balance sheet budgeted income statement sales budget

budgeted balance sheet

Budgets Blank______. Multiple choice question. focus on what has happened in the past communicate management's plan throughout the organization primarily help managers with day-to-day emergencies

communicate management's plan throughout the organization

The cash budget Blank______. Multiple choice question. is the first budget prepared in the master budget process uses information from the budgeted balance sheet and income statement is prepared near the end of the master budget process

is prepared near the end of the master budget process

An integrated business plan that formally lays out the company's goals is called the Blank______ budget. Multiple choice question. profit planning sales master self-imposed

master

The budgeted income statement does NOT rely on information from the Blank______ budget. Multiple choice question. ending finished goods inventory production selling and administrative expense sales

production

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget? Multiple choice question. Production Direct labor Sales Selling and administrative

production

Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate. Multiple choice question. cash Reason: The cash budget requires input from many other budgets and is one of the last budgets prepared. direct materials Reason: The direct materials budget cannot be completed until a company knows how many items to produce. sales production

sales

he first step in the budgeting process is the preparation of the _______budget.

sales

A perpetual budget keeps managers focused at least one year ahead by adding one Blank______.

year to the end of the budget as each month or quarter comes to a close

A 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed is called a(n)____________ or continuous budge

perpetual

In a manufacturing company, the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based on the ________budget.

production

Budgets Blank______. Multiple select question. and the budgeting process can uncover potential bottlenecks before they occur provide each department with the same amount of money to spend, so that all departments are treated fairly Reason: Money is allocated to each department where it can be used most effectively. coordinate the activities of the entire organization by integrating the plans of its various parts encourage managers to think about and plan for the future define goals and objectives that can serve as benchmarks for evaluating subsequent

and the budgeting process can uncover potential bottlenecks before they occur coordinate the activities of the entire organization by integrating the plans of its various parts encourage managers to think about and plan for the future define goals and objectives that can serve as benchmarks for evaluating subsequent performance

select all that apply Master budget schedules Blank______. Multiple select question. answer several key questions for a company are based on estimates and assumptions may be prepared in any order

answer several key questions for a company are based on estimates and assumptions

The annual master budget file includes the Blank______ from last year because it is needed for the schedule of expected cash collections. Multiple choice question. cash budget sales budget balance sheet income statement

balance sheet

Developing goals and preparing various budgets to achieve those goals is part of the_____________ process

planning

Multiple Choice Question Budgets are used for two distinct purposes: Blank______ and Blank______. Multiple choice question. advising; consulting benchmarking; integrating planning; control executing; overseeing

planning, control

A number of separate, but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the _______ budget.

Master

In a manufacturing company, which budget is used as the basis for creating the direct materials budget, the direct labor budget, and the manufacturing overhead budget? Multiple choice question. Cash Production Finished goods inventory Sales

Production

Both the production and selling and administrative expense budgets are prepared using information directly from the ______budget.

Sales

Many of the schedules in a master budget are based on a variety of management estimates and assumptions. True false question.TrueFalse

True

Which of the following budgets are directly based on information from the sales budget? Multiple select question. Manufacturing overhead Reason: The overhead budget is based on the number of units to be produced, not sold. Direct materials Reason: The direct materials budget is based on the number of units to be produced, not sold. Production Selling & administrative expense

Selling & administrative expense Production