ACCT exam 3 chapter 8

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

beginning

The ending finished goods inventory computes:

cost of unsold units

The purpose of a budget:

establish goals isolate areas needing attention measure operating results

When profit targets are set by top managers:

waste may occur too much slack may be allowed goals may be unrealistically high

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

Selling and Administrative

Borrowing money is required whenever:

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

Highly achievable budget targets:

1.are used in most companies 2.may generate greater management commitment to the budget 3. may help build manager confidence

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

budgeted income statement

In a manufacturing company, which budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories?

direct materials budget

if a budget initiated by top management has targets that are set too high:

motivation will suffer

In companies that do NOT use self-imposed budgeting process, profit targets are generally set by:

top managers