ACC Exam 3

* the cash excess is less than the minimum required cash balance * there is a cash deficiency

Borrowing money is required whenever__________.

selling and administrative

Budgeted expenses for areas other than manufacturing are shown on the _____ budget.

direct materials

In a manufacturing company, the ___________, ___________ (2words) budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.

production

the direct labor budget is based directly on the ____ budget

cost of goods sold

the first line of a merchandise purchases budget expressed in dollars is budgeted __________.

sales

the first step in the budgeting process is preparing the _________ budget

makes it easier to answer "what-if" questions

using budgeting assumptions when preparing the master budget, ______

master

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

An integrated business plan that formally lays out the company's goals is called the Blank______ budget.

budgetary slack

When a manager creates a budget that is too easy to attain, ______ occurs

beginning

A budgeted balance sheet is developed using data from the Blank______ of the budget period and data contained in the various schedules.

merchandise purchases

The amount of goods to be acquired from suppliers during the period is shown on the Blank______ budget

ending balance sheet

The budgeted income statement does not contain data from the Blank______.

cost of goods sold

The first line of a merchandise purchases budget expressed in dollars is budgeted __________.

produced

The first line of the direct labor budget consists of the budgeted units expected to be Blank______ during the period.

Balance Sheet

The first tab included in the master budget file is generally a(n) Blank______ because it is needed for the schedule of expected cash collections.

True

Unless a company operates on a 100% cash basis, with no accounts receivable, it is unlikely that sales will ever equal cash collections. T/F

Sales

What is usually the major source of receipts in the receipts section of the cash budget?

create the budget with a budgeting assumption tab

When creating an Excel budget and performing what-if analysis, it is generally easiest to Blank______.

desired ending inventory of units

Which of the following is NOT included on the sales budget?

C. Cash deficiency

Which of the following is not found in the financing section of the cash budget? A. Repayments B. Borrowings C. Cash deficiency D. Interest

sales

Because all other parts of the budget depend on it, if the ______ budget is inaccurate, the rest of the budget will be inaccurate.

balance sheet

Because it is needed for the schedule of expected cash collections, and the cash budget the annual master budget file generally starts with the beginning __________ ____________.(two words)

direct materials

in a manufacturing company the __________ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories

direct materials

in a manufacturing company, the _________ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories.

cash

The receipts, disbursements, excess or deficiency, and financing section are all parts of the _________ budget.

manufacturing overhead

the calculation of unit product cost requires information from the _______ budget.

the cash excess is greater than the minimum required cash balance

A company can repay outstanding principal and interest when __________.

planning; control

Budgets are used for two distinct purposes: Blank______ and Blank______.

communicate management's plan throughout the organization.

Budgets_________

$35,000 + $50,000- $80,000 = $5,000. Since they can borrow in increments of $10,000 they must borrow $20,000 to meet or exceed the minimum cash balance making the ending balance $25,000

Madison Corporation's expected beginning cash balance is $35,000. Cash collections are budgeted at $50,000 and cash disbursements are estimated to be $80,000. The minimum required cash balance is $20,000 and the company can borrow as much as needed in increments of $10,000. Calculate the expected ending cash balance for the month.

True

Many of the schedules in a master budget are based on a variety of management estimates and assumptions. T/F?

A, D

The selling and administrative expense budget________ A. estimates nonmanufacturing expenses B. begins with budgeted quarterly unit production C. excludes all noncash expenses D. is divided into variable and fixed components

balance sheet as of

To prepare a budgeted balance sheet as of December 31, 20x4, data is needed from the _________ December 31, 20x3

False

Total sales for the year reported on the Sales Budget will always be equal to expected cash collections for the year. T/F?

budget period

is the length of time a budget should cover

Budgeted income statement

what is the name of the company's planned profit budget?

Sales

what is usually the major source of receipts in the receipts section of the cash budget ?

A. Desired ending inventory of units

which is not included on the sales budget? A. Desired ending inventory of units B. Expected cash collections C. Budgeted number of units to be sold D. Selling price per unit

direct labor

working hours required to satisfy the production budget are shown on the _______ budget.

a budget

A detailed plan for the future that is usually expressed in formal quantitative terms is Blank______.

budget

A detailed plan for the future that is usually expressed in formal quantitative terms is a(n)__________.

sales

Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate.

B, C, D, E

Budgets________. A. provide each department with the same amount of money to spend, so that all departments are treated fairly B. encourage managers to think about and plan for the future C. coordinate the activities of the entire organization by integrating the plans of its various parts D. and the budgeting process can uncover potential bottlenecks before they occur E. define goals and objectives that can serve as benchmarks for evaluating subsequent performance

control/controlling

Gathering feedback to ensure that the plan is being followed is referred to as___________-

production

In a manufacturing company, the ________ budget is prepared right after the sales budget.

production

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.

motivation, accuracy, accountability

Involving lower-level managers increases Blank______ in the budgeting process.

* suboptimal budget recommendations * budgetary slack

Limitations of self-imposed budgeting include Blank______.

budgetary slack, suboptimal budget recommendations

Limitations of self-imposed budgeting include ______. unrealistic profit targets, budgetary slack, a broad strategic perspective, suboptimal budget recommendations

$15,000

Madison Corporation's expected beginning cash balance is $22,000. Cash collections are budgeted at $60,000 and cash disbursements are estimated to be $75,000. The minimum required cash balance is $20,000 and the company can borrow as much as needed in increments of $5,000. Required borrowings for the period equal $ .

A, B

Master budget schedules ______. (choose all that apply) A. are based on estimates and assumptions B. answer several key questions for a company C. may be prepared in any order

lower-level managers

More accurate estimates are generally the result of having profit targets set by ______

cash disbursements

On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency?

manufacturing overhead

all costs of production other than direct materials and direct labor are shown on the ______( 2 words) budget.

produced

the first line of the direct labor budget consists of the budgeted units expected to be _________ during the period.

responsibility accounting

the idea that a manager should be help responsible for only those items they can actually control

direct labor

the number of working hours required to satisfy the production budget in shown on the _______, _________ (2 words) budget.

A, C, D,

which of the following budgets are needed to calculate unit product costs? A. Manufacturing overhead B. Selling and administrative C. Direct labor D. Direct materials E. Cash