Accounting exam 3 practice
Sales Budget is used to prepare
A schedule of Expected Cash collections
Expected cash collections
Arrives from Current & Prior sales
Sales Revenue=
Budgeted unit sales x Unit Selling Price
Which of the following explains why operating budgets generally span a period of one year?
Companies choose a span of one year to correspond to their fiscal years.
Self-imposed budget has 2 important limitations.
Lower-level Managers: Suboptimal budgeting estimates Budgetary Slack
Which of the following is not a benefit of self-imposed budgets?
Lower-level managers are encouraged to create budgetary slack since they are more knowledgeable of day-today operations.
The budgeting process begins with the preparation of the blank budget.
Sales
which of the following is not one of the reasons that organizations use budgets?
The budgeting process enables managers to uncover bottlenecks as they occur.
Cash budget
cash budget is the cash T-accounts.
Control
compare budgets to actual results to improve the efficiency and effectiveness. Evaluate and reward employees.
Two Key Budget Insights
the budget is designed to answer 10 key questions. The budget is based on various elements and assumptions.