Accounting questions Ch. 20

IP Company has a preliminary cash balance of $25,000 and an agreement with the bank that it will keep a minimum balance of $20,000. IP Company has a beginning loan balance of $12,000. IP Company's ending loan balance is

7,000

Which of the following items would be included in an activity-based budget?

Auditing Financial Reporting Cost Accounting

Telecom Company is preparing its annual budgeted income statement. What is the best place to locate the amount of interest expense for the year?

Cash budget

All of the following items would be included in a Selling Expense Budget except

Factory Overhead

When preparing a master budget for a manufacturing company, which of the following budgets should be prepared second?

Production

All of the following items would be included in a General and Administrative Expense Budget except

depreciation on factory equipment.

A potential negative outcome of budgeting is that

employees may understate sales budgets and overstate expenses.

Telecom Company is preparing its budgeted balance sheet for the end of the year. Assuming that no dividends were declared during the year, what is the best place to locate ending retained earnings?

from the current year's net income plus the previous year's retained earnings balance.

All of the following are components of the master budget except

income

In a cash budget, the beginning cash balance plus budgeted cash receipts minus budgeted cash payments equals

preliminary cash balance Correct

A rolling budget is updated on a _____ basis.

quarterly

A capital expenditures budget includes cash estimated to be purchase and/or cash expected to be received from

sale of plant assets.

IP Company has a beginning cash balance of $5,000; cash receipts of $20,000; cash disbursements of $15,000. IP Company's preliminary cash balance is

10,000

IP Company pays for purchases of materials in full in the month following the purchase. During the previous month, IP had purchases of $25,000. During the current month, IP had purchases of $30,000. The amount that IP will pay during the current month for purchases is

25,000