Accounting Final chapter 22

Which of the following is shown on the budgeted balance sheet?

Which of the following is shown on the budgeted balance sheet?

Which of the following will have the greatest impact on the sales budget?

a major customer goes out of business

The ___________ is the end product of the operating budgets.

budgeted income statement

Masters, Inc. prepares a budget that always includes 12 months of data. As each month ends, it is removed from the budget, and another month is added. Masters uses which type of budget?

continuous

If a company's sales budget is too optimistic, the company may

end up with too much inventory.

What is a part of the budgeted balance sheet based on operating budgets?

finished goods inventory, raw materials inventory, and retained earning

The budgets of ________ entities tend to be authorized on a line-by-line basis.

governmentalwil

What is a characteristic of long-range planning?

Management considers anticipated trends in the economic and political environment.

To plan its sales and production for the upcoming year, a company creates a(n) ________ budget.

Operating

________ budgets are most likely to include budgetary slack.

Participative

In which of the following entities is budgeting necessary?

Service Companies and Not-for-Profit

How does a merchandise purchases budget differ from a production budget?

A merchandise purchases budget is based on goods to be purchased, whereas a production budget is based on goods to be made.

cash disbursements

Cash payments made by a business.

Which of the following companies is likely to have the least formal budget process?

Betty's Bakery, a small-town bakery that has been open for three years

Which of the following individuals would normally be included on the budget committee? Company president Sales manager

Both

Which of the following is the correct sequencing of the following budgets? Budgeted income statement Budgeted balance sheet Cash budget

Budgeted Income Statement Cash Budget Budgeted Balance Sheet

Budgeted production can be computed as

Budgeted sales + Budgeted ending inventory - Budgeted beginning inventory.

Which of the following represents the flow of budget data under participative budgeting?

Department Manager to Plant Manager to Vice President of Production

Eliciting information from lower-level operating managers and their subordinates with the help of a bottom-up budgeting process

is a costly but beneficial exercise.

When a service firm's staff has an excessive work load,

it is likely understaffed.

A company that uses the top-down approach rather than a participative process will feel the impact of its budgeting process mostly in which form?

lack of commitment of operating managers to the final budget

Sotelo Restaurants produced a one-year budget. At the end of the year, top managers and executives were disappointed to find that they had spent 8% more than they had planned without a compensating increase in sales. The most likely reason for this is that is..

lower-level managers felt the budget was unfair.

The ________ budget shows the estimated cost of goods to be purchased to meet expected sales.

merchandise purchases

A collection of smaller budgets that leads to budgeted financial statements is the

operating budget.

Jackie and Carolyn are working together to develop the operating budgets. If Jackie is working on the direct materials budget and Carolyn is working on the direct labor budget, what common information will they both need to complete their budgets?

the number of units to be produced each period