ACCT 2101 CH 9 AP

early warning sign of problems.

It was nearing the end of the budgetary quarter, and the sales manager realized that his sales team had only reached 90% of the company's projected sales for the quarter. He met with his sales staff to brainstorm ideas to boost sales over the next few days, and with the cooperation of his team they met their sales goals. In this situation, the budget served as a(n)

Hiring budget

Peter is helping the CFO develop the master budget. Which of the following budgets are they LEAST likely to develop?

3., 4., 2., 1.

Place the following four budgets into their correct sequence of preparation: 1. Capital expenditure budget 2. Selling and administrative expense budget 3. Sales budget 4. Direct materials budget

1., 4., 3., 2.

Place the following four budgets into their correct sequence of preparation: 1. Production budget 2. Cash budget 3. Budgeted income statement 4. Direct labor budget

Budget committee - puts budget in final form and approves.

Which of the following terms is correctly paired with its description?

master budget.

A collection of interrelated budgets that constitutes a plan of action for a specified time period is the

At the beginning.

As an accountant, you were asked to collect financial data for the past three years from the sales, production, research, and marketing departments. Based on this information, at what point is the company in its budgeting process?

less likely to be realistic.

As compared to a bottom-to-top budget, a top-down budget is

bottom-to-top approach.

If a company wished to create a more realistic budget, it could follow a

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

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

Operating budgets - result in preparation of the budgeted income statement.

Which of the following terms is correctly paired with its description?

The company only wants to produce as many units as it expects to sell.

Why is a company's sales budget developed before the production budget?

Partcipative

________ budgets are most likely to experience budgetary slack.

Sales budget.

Ellen is a manager who helps develop sales promotions, targets customers for upselling, and searches for potential new customers. Which of the following budgets would Ellen MOST likely help develop?

She should help develop the sales budget before the production budget because production will depend on the number of sales.

Hailey has been tasked with overseeing the development of the company's master budget. This is the first time Hailey has had this role, and she's not sure where to start. What advice would you give her? Why?

At the end of the budget period.

Michael was asked to collect the financial data from all the different departments so that top management could determine if they met their goals. At what point is the company in its budgeting process?

budget accepted by all levels of management.

Naylor Industries produced a master budget that was strictly followed by all departments. At the end of the period, the actual numbers were off by less than 1% of the budgeted numbers. It is likely that Naylor Industries had a

a motivator to meet planned objectives

Budgets are

is a more time consuming and costly but beneficial exercise.

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

False

The cash budget is prepared before the operating budget