accounting 8

A company with adequate cash balances at the beginning and end of the year:

may still have cash deficiency issues during the year

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

merchandise purchase budget

Using a budget to blame or pressure employees to do a better job leads to:

mistrust

A perpetual budget keeps managers focused at least one year ahead by adding one:

month to the end of the budget as each month comes to a close

Budget two purpose

planning control

self-imposed limitations

thoughts and feelings that are barriers to personal well-being. -walls that keep us confined mentally and emotionally.

Planning

involves developing goals and preparing various budgets to achieve those goals

Control

involves gathering feedback to ensure that the plan is being properly executed

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

master budget

Budgeted expenses for areas other than manufacturing are shown on the ______ budget.

selling and administrative

Advantages of Budgets

1. communicating 2. planning 3. define goals and objectives that can serve as benchmarks for evaluating subsequent performance 4. force managers to think about and plan for the future 5.coordinate the activities of the entire organization by integrating the plans of its various parts 6. and the budgeting process can uncover potential bottlenecks before they occur

Self-imposed budget (participative budget)

A method of preparing budgets in which managers prepare their own budgets. These budgets are then reviewed by higher-level managers, and any issues are resolved by mutual agreement.

Responsibility Accounting

A system of accountability in which managers are held responsible for those items of revenue and cost—and only those items—over which they can exert significant control. The managers are held responsible for differences between budgeted and actual results.

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

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

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

On the cash budget, what is subtracted from total cash available to find the cash excess or deficiency?

Cash disbursements

True or false: For most companies a single, annual cash budget is sufficient.

False

Which of the following budgets are directly based on information from the sales budget

Production budget Selling and administrative expense budget

Which of the following is needed to prepare a sales budget

The budgeted number of units to be sold

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

The budgeted number of units to be sold

budget slack

The influence of behavior to "pad" a budget via misstating expected revenues and/or expenses; to create more favorable budget vs. actual performance appraisals

imposed budget

a budget developed by top management with little or no input from operating personnel; operating personnel are then informed of the budget objectives and constraints

the annual master budget file includes the ________ from last year because it is needed for the schedule of expected cash collections.

balance sheet

To prepare a budgeted balance sheet as of December 31, 2016, data is needed from the:

balance sheet as of December 31, 2015

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 budget computes the

cost of unsold units

True or false: The definition of responsibility accounting states that senior management is directly responsible for every decision made by lower level managers.

false

The cash budget includes four major sections

receipts, disbursements, the cash excess or deficiency, and financing

The first step in the budgeting process is preparing the

sales budget

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

sales price per unit

More accurate estimates and higher motivation are generally the result of using a

self-imposed budget