Accounting exam 3

Borrowing money is required whenever:

1. There is a cash deficiency 2. The cash excess is less than the minimum required cash balance.

Risk of not knowing in advance how much labor time will be needed throughout the budget period includes:

1. erratic layoffs 2. low employee morale 3. labor shortage

A company's planned net profit that serves as a benchmark against which subsequent company's performance can be measured is shown on the budgeted________.

income statement

An essential management tool that communicate's management plans throughout the organization, allocates resources, and coordinates activities is called the _______ budget.

master

Operating budgets usually cover a _____ period.

one-year

In the manufacturing company, the _________ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory.

production

Cash budgeting includes four major sections:

receipts, disbursements, the cash excess of deficiency, and financing

Under the concept of_____________________, managers should only be held accountable for items that they can actually control.

responsibility accounting

First step in the budgeting process is the preparation of the_____ budget

sales

Budgeted expenses for areas other then manufacturing are shown on the ______ budget.

selling and administrative

In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the______ budget.

selling and administrative

A company can consider making investments or repay outstanding principle and interest when

the cash excess is greater than the minimum required cash balance

required borrowings on a cash budget is calculated by:

adding the desired ending cash balance to the amount of the cash deficiency.

The receipt section of the cash budget lists:

all cash inflows, except from financing

To prepare a budgeted balance sheet as of December 31,2016, data is needed from the:

balance sheet from December 31,2016

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

beginning

Which budget shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured?

budgeted incomes statement

The receipts, disbursements, excess or deficiency, and finance section are all parts of the:

cash budget

Gathering feedback to ensure that the plan is being followed is referred to as______.

control

The ending finished goods inventory budget computes the:

cost of unsold units

Payments for direct materials, direct labor, and manufacturing overhead costs are all listed in the______section of the cash budget.

disbursements

The cost of unsold units is computed on the______budget.

ending finished goods inventory.

T/F The amount under the year column in the cash budget always equal the sum of the amounts for the months or quarters of the budget.

false

The section on the cash budget that summarizes all cash payments that are planned for the budget period is the cash________section.

disbursements