Chp.8 Multiple Choice ACC 377

A master budgets is an example of a(n): a. static budget. b. flexible budget. c. zero-based budget. d. incremental budget.

a

Control can be defined as a. the process of setting standards, receiving feedback on actual performance, and taking corrective action whenever actual performance deviates significantly from plan. b. a quantification of plans, stated in either physical or financial terms, or both. c. identification of corporate objectives. d. a comprehensive financial plan.

a

Which of the following refers to quantitative plans for the future, stated in either physical terms or financial terms or both?

A budget

. The budgets that are concerned with the income-generating activities of a firm are called the: a. Operating budgets b. Master budgets c. Financial budgets d. Continuous budgets

a

Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25 percent of the next month's sales. Asian Lamp expects to sell the lamps for $25 each. January sales is projected at 16,000 lamps. In going from the sales budget to the production budget, adjustments to the sales budget need to be made for a. finished goods inventories. b. cash receipts. c. factory overhead costs. d. selling expenses.

a

Which of the following is NOT a responsibility of the budget committee? a. prepare actual financial statements b. provide policy guidelines c. provide budgeting goals d. resolve differences that may arise as the budget is prepared

a

The budgets that are comprehensive financial plans made up of various individual departmental and activity budgets are the: a. Operating budgets b. Master budgets c. Financial budgets d. Continuous budgets

b

The following is responsible for directing and coordinating the overall budgeting process: a. budget committee b. budget director c. president d. treasurer

b

Which of the following budgets provides budgeted costs for actual level of activity? a. A cash budget b. A flexible budget c. An efficiency budget d. An incremental budget

b

Which of the following ensures that the budget is linked to the strategic plan of the organization? a. The budget council b. The budget committee c. The budget operator d. The budget auditor

b

Which of the following is the basis for all operating budgets and most financial budgets? a. A delivery forecast b. A sales forecast c. A technical forecast d. A labor forecast

b

. Which of the following statement is correct regarding a continuous budget? a. The budget is prepared for a one-year period that corresponds to the company's fiscal year. b. A continuous budget is a monthly budget. c. As a month/period expires in the budget, an additional month/period in the future is added so the company always has a 12-month budget on hand. d. None of these

c

The budgeted income statement is a component of the: a. cash budget. b. overhead budget. c. operating budget. d. investing budget.

c

The budgets that are concerned with the inflows and outflows of cash and with financial position are called the: a. Operating budgets b. Master budgets c. Financial budgets d. Continuous budgets

c

The type of budget that is a moving twelve-month budget is called the: a. zero-based budget b. flexible budget c. continuous budget d. both a and b

c

. Which of the following is true of a budget committee? a. It takes care of the marketing activities of a firm. b. It ensures that shareholders approve the budget. c. It works under the direction of the budget director. d. It is responsible for reviewing the budget.

d

Operating budgets are a. a forecast of expected operating expenses. b. a forecast of operating expenses and related revenues. c. a forecast of units of production. d. concerned with the income-generating activities of a firm.

d

Which of the following factors is NOT an advantage of preparing operating budgets? a. It provides resource information that can be used to improve decision making. b. It improves communication and coordination. c. It aids in the use of resources and employees by setting a benchmark that can be used for the subsequent evaluation of performance. d. It saves time and resources.

d

Which of the following is NOT an advantage of budgeting? a. It forces managers to plan. b. It provides resource information that can be used to improve decision making. c. It aids in the use of resources and employees by setting a benchmark that can be used for the subsequent evaluation of performance. d. It provides organizational independence.

d

Which of the following is NOT a component of the master budget? a. Sales Budget b. Capital Budget c. Cost of Goods Sold Budget d. Budget to Actual Variance Analysis

d. budget to actual variance analysis