Unit 3

Which of the following is needed to prepare a sales budget?

The budgeted number of units to be sold

Many of the schedules in a master budget are based on a variety of management estimates and assumptions.

True Reason: Managers must make a number of estimates and assumptions when preparing a master budget.

A detailed plan for the future that is usually expressed in formal quantitative terms is ______.

a budget

Master budget schedules Blank______.

are based on estimates and assumptions answer several key questions for a company

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

cash

The cash budget includes four major sections: receipts, disbursements, the cash excess or deficiency, and

financing, borrowing, finance, or finances

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

An integrated business plan that formally lays out the company's goals is called the ______ budget.

master

A number of separate, but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the

master budget

Borrowing money is required whenever______.

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

Because it is needed for the schedule of expected cash collections, the annual master budget file includes the

balance sheet

To prepare a budgeted balance sheet as of December 31, 2020, data is needed from the ______ December 31, 2019.

balance sheet as of

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

beginning

A detailed plan for the future that is usually expressed in formal quantitative terms is a(n)

budget

Budgets Blank______.

communicate management's plan throughout the organization

When creating an Excel budget and performing what-if analysis, it is generally easiest to

create the budget with a budgeting assumption tab

The ending finished goods inventory budget computes the cost of Blank______ units.

unsold

In a manufacturing company, the______budget is prepared right after the sales budget.

production

Which of the following is not found in the financing section of the cash budget?

Cash deficiency

Budgets ______.

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 encourage managers to think about and plan for the future and the budgeting process can uncover potential bottlenecks before they occur

Working hours required to satisfy the production budget are shown on the______ budget.

direct labor

Developing goals and preparing various budgets to achieve those goals is part of

planning

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.

production

Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate.

sales

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 income statement

True or false: Control involves developing goals and preparing various budgets to achieve those goals.

False Reason: Control involves the steps taken by management to increase the likelihood that all parts of the organization are working to achieve the goals set down in the planning stage.

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

The cost of unsold units is computed on the ______ budget.

ending finished goods inventory

Using budgeting assumptions when preparing the master budget,______.

makes it easier to answer "what-if" questions

The first step in the budgeting process is the preparation of the

sales

To calculate total sales on the sales budget, multiply budgeted sales in units by Blank______.

sales price per unit

A manager cannot complain that the budget was unrealistic and impossible to meet when a(n)

self-imposed

Recognizing individuals at all levels of the organization as team members whose views and judgments are valued by top management is an advantage of

self-imposed budgeting

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

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

All costs of production other than direct materials and direct labor are shown on the

manufacturing overhead

The amount of goods for resale to be acquired from suppliers during the period is shown on the

merchandise purchases

The amount of goods to be acquired from suppliers during the period is shown on the______ budget.

merchandise purchases