Managerial Accounting Chapter 8
A detailed plan for the future that is usually expressed in formal quantitative terms is a(n) ____
budget
The receipts, disbursements, excess or deficiency, and financing section are all parts of the ______ budget. -sales -production -selling and administrative expense -cash
cash
A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown on the budgeted ____ ____
income statement
Using budgeting assumptions when preparing the master budget, ______. -makes it easier to answer "what-if" questions -involves adjusting data inputs within each master budget schedule -increases the complexity of the process
makes it easier to answer "what-if" questions
All costs of production other than direct materials and direct labor are shown on the ____ ____ budget
manufacturing overhead
An integrated business plan that formally lays out the company's goals is called the ______ budget. -master -profit planning -sales -self-imposed
master
The amount of goods for resale to be acquired from suppliers during the period is shown on the ____ ____ budget
merchandise purchases
The amount of goods to be acquired from suppliers during the period is shown on the _______ budget. -direct labor -merchandise purchases -sales -manufacturing overhead
merchandise purchases
In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the ______ budget. -manufacturing overhead -selling and administrative -ending finished goods inventory -cash
selling and administrative
A company can consider making investments or repay outstanding principal and interest when ______. -the cash excess is greater than the minimum required cash balance -the cash excess is less than the minimum required cash balance -the cash excess equals the minimum required cash balance -there is a cash deficiency
the cash excess is greater than the minimum required cash balance
The annual master budget file includes the ______ from last year because it is needed for the schedule of expected cash collections. -cash budget -balance sheet -income statement -sales budget
balance sheet
To prepare a budgeted balance sheet as of December 31, 2020, data is needed from the ______ December 31, 2019. -income statement for the year ended -balance sheet as of -statement of cash flows for the year ended
balance sheet as of
When a manager creates a budget that is too easy to attain, ______ occurs. -perpetual budgeting -participative budgeting -budgetary slack -self-imposted budgeting
budgetary slack
The number of working hours required to satisfy the production budget is shown on the ____ ____ budget
direct labor
Working hours required to satisfy the production budget are shown on the ______ budget. -cash -direct materials -merchandise purchases -direct labor
direct labor
More accurate estimates and higher motivation are generally the result of using a(n) ______ budget. -imposed -participative -perpetual -continuous
participative
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 balance sheet -Budgeted income statement -Budgeted selling and administrative expenses -Manufacturing overhead budget
Budgeted income statement
True or false: Control involves developing goals and preparing various budgets to achieve those goals.
False
True or false: Many of the schedules in a master budget are based on a variety of management estimates and assumptions.
True
A detailed plan for the future that is usually expressed in formal quantitative terms is ______. -a budget -responsibility accounting -the budget period -profit planning
a budget
Required borrowings on a cash budget is calculated by ______. -subtracting the desired ending cash balance from the amount of cash excess -subtracting the beginning cash balance from the amount of the cash deficiency -adding the desired ending cash balance to the amount of cash excess -adding the desired ending cash balance to the amount of the cash deficiency
adding the desired ending cash balance to the amount of the cash deficiency
Because it is needed for the schedule of expected cash collections, the annual master budget file includes the ____ ____ from last year
balance sheet
Budgets ______. -communicate management's plan throughout the organization -focus on what has happened in the past -primarily help managers with day-to-day emergencies
communicate management's plan throughout the organization
Budgets are used for two distinct purposes: ______ and ______. -planning; control -benchmarking; integrating -advising; consulting -executing; overseeing
planning; control
In a manufacturing company, the ____ budget is prepared right after the sales budget.
production
A manager cannot complain that the budget was unrealistic and impossible to meet when a(n) ____-____ budget is in place.
self-imposed
Budgeted expenses for areas other than manufacturing are shown on the ______ budget. -ending finished goods inventory -selling and administrative -cash -manufacturing overhead
selling and administrative
When creating an Excel budget and performing what-if analysis, it is generally easiest to ______. -create the budget with a budgeting assumption tab -copy the master budget and make change to the copy only -adjust data inputs within each master budget schedule
create the budget with a budgeting assumption tab
The cost of unsold units is computed on the ______ budget. -ending finished goods inventory -manufacturing overhead -sales -production
ending finished goods inventory
The ending finished goods inventory budget computes the cost of ______ units. -sold -unsold
unsold
The receipts section of the cash budget lists ______. -all cash inflows, except from financing -total credit sales -all cash inflows -total sales for the period
all cash inflows, except from financing
Select all that apply Master budget schedules ______. -may be prepared in any order -answer several key questions for a company -are based on estimates and assumptions
answer several key questions for a company are based on estimates and assumptions
A budgeted balance sheet is developed using data from the ______ of the budget period and data contained in the various schedules. -end -average -beginning
beginning
The section on the cash budget that summarizes all cash payments that are planned for the budget period is the cash ____ section
disbursements
All costs of production other than direct materials and direct labor are shown on the ______ budget. -merchandise purchases -cash -manufacturing overhead -ending finished goods inventory
manufacturing overhead
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
Developing goals and preparing various budgets to achieve those goals is part of ______, -responsibility accounting -control -the budget period -planning
planning
Developing goals and preparing various budgets to achieve those goals is part of the ____ process
planning
Select all that apply Borrowing money is required whenever ______. -the cash excess is greater than the minimum required cash balance -there is a cash deficiency -the cash excess equals the minimum required cash balance -the cash excess is less than the minimum required cash balance
there is a cash deficiency the cash excess is less than the minimum required cash balance
Budgetary slack occurs when a manager submits a budget that is ______. -too easy to attain -vague -too difficult to attain -much like budgets submitted over the previous few years
too easy to attain
Because all other parts of the budget depend on it, if the ______ budget is inaccurate, the rest of the budget will be inaccurate. -sales -production -cash -direct materials
sales
To calculate total sales on the sales budget, multiply budgeted sales in units by ______. -number of units -sales price per unit -budgeted unit sales
sales price per unit
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 -sales -production -merchandise purchases
direct materials
The first step in the budgeting process is preparing the ______ budget. -sales -direct materials -cash -production
sales
Select all that apply Budgets ______. -coordinate the activities of the entire organization by integrating the plans of its various parts -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 -force managers to think about and plan for the future -define goals and objectives that can serve as benchmarks for evaluating subsequent performance
coordinate the activities of the entire organization by integrating the plans of its various parts and the budgeting process can uncover potential bottlenecks before they occur force managers to think about and plan for the future define goals and objectives that can serve as benchmarks for evaluating subsequent performance
Which of the following is needed to prepare a sales budget? -Desired ending inventory of raw materials -Beginning inventory of finished goods -Desired ending inventory -The budgeted number of units to be sold
The budgeted number of units to be sold
In a manufacturing company, the ______ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory. -sales -production -direct materials -cash
production