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The cash budget must be prepared before you can complete the:




The cash budget must be prepared before you can complete the;a. production budget.;b. budgeted balance sheet.;c. raw materials purchases budget.;d. schedule of cash disbursements.;Save Answer;2.;(Points: 1);Which of the following is not a benefit of budgeting?;a. It uncovers potential bottlenecks before they occur.;b. It coordinates the activities of the entire organization by integrating the plans and objectives of the various parts.;c. It ensures that accounting records comply with generally accepted accounting principles.;d. It provides benchmarks for evaluating subsequent performance.;Save Answer;3.;(Points: 1);The master budget process usually begins with the;a. production budget.;b. operating budget.;c. sales budget.;d. cash budget.;Save Answer;4.;(Points: 1);A method of budgeting in which the cost of each program must be justified every year is called;a. operational budgeting.;b. zero-based budgeting.;c. continuous budgeting.;d. responsibility accounting.;Save Answer;5.;(Points: 1);Fairmont Inc. uses an accounting system that charges costs to the manager who has been delegated the authority to make decisions concerning the costs. For example, if the sales manager accepts a rush order that will result in higher than normal manufacturing costs, these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager. This type of accounting system is known as;a. responsibility accounting.;b. contribution accounting.;c. absorption accounting.;d. operational budgeting.;Save Answer;6.;(Points: 1);Budgeted sales in Allen Company over the next four months are given below;September October November December;Budgeted sales $100,000 $160,000 $180,000 $120,000;Twenty-five percent of the company's sales are for cash and 75% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month's sales are collected in the month of sale, 30% are collected in the month following sale, and 15% are collected in the second month following sale. The remainder are uncollectible. Given these data, cash collections for December should be;a. $153,000.;b. $138,000.;c. $120,000.;d. $103,500.;Save Answer;7.;(Points: 1);The PDQ Company makes collections on credit sales according to the following schedule;25% in month of sale;70% in month following sale;4% in second month following sale;1% uncollectible;The following sales have been budgeted;Month Sales;April $100,000;May 120,000;June 110,000;Cash collections in June would be;a. $113,400.;b. $110,000.;c. $111,000.;d. $115,500.;Save Answer;8.;(Points: 1);Pardee Company plans to sell 12,000 units during the month of August. If the company has 2,500 units on hand at the start of the month, and plans to have 2,000 units on hand at the end of the month, how many units must be produced during the month?;a. 11,500.;b. 12,500.;c. 12,000.;d. 14,000.;Save Answer;9.;(Points: 1);Superior Industries' sales budget shows quarterly sales for the next year as follows;Quarter Sales (units);First 10,000;Second 8,000;Third 12,000;Fourth 14,000;Company policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales. Budgeted production for the second quarter should be;a. 7,200 units.;b. 8,000 units.;c. 8,800 units.;d. 8,400 units.;Save Answer;10.;(Points: 1);The Willsey Merchandise Company has budgeted $40,000 in sales for the month of December. The company's cost of goods sold is 30% of sales. If the company has budgeted to purchase $18,000 in merchandise during December, then the budgeted change in inventory levels over the month of December is;a. $6,000 increase.;b. $10,000 decrease.;c. $22,000 decrease.;d. $15,000 increase.;Save Answer;11.;(Points: 1);ABC Company has a cash balance of $9,000 on April 1. The company must maintain a minimum cash balance of $6,000. During April expected cash receipts are $45,000. Expected cash disbursements during the month total $52,000. During April the company will need to borrow;a. $2,000.;b. $4,000.;c. $6,000.;d. $8,000.;Save Answer;12.;(Points: 1);Avril Company makes collections on sales according to the following schedule;30% in the month of sale;60% in the month following sale;8% in the second month following sale;The following sales are expected;Expected Sales;January $100,000;February 120,000;March 110,000;Cash collections in March should be budgeted to be;a. $110,000.;b. $110,800.;c. $105,000.;d. $113,000.;Save Answer;13.;(Points: 1);The Stacy Company makes and sells a single product, Product R. Budgeted sales for April are $300,000. Gross Margin is budgeted at 30% of sales dollars. If the net income for April is budgeted at $40,000, the budgeted selling and administrative expenses are;a. $133,333.;b. $50,000.;c. $102,000.;d. $78,000.;Save Answer;14.;(Points: 1);Use the following to answer questions 14-15;KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given.;May June July;(actual) (budget) (budget);Sales $42,000 $40,000 $45,000;Cost of sales 21,000 20,000 22,500;Gross margin 21,000 20,000 22,500;Operating expenses 20,000 20,000 20,000;Operating income $ 1,000 $ 0 $ 2,500;Sales are collected 80% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the sale. The "operating expenses" are paid in the month of the sale. The amount of cash collected during the month of June should be;a. $32,000.;b. $40,000.;c. $40,400.;d. $41,000.;Save Answer;15.;(Points: 1);The cash disbursements during the month of June for goods purchased for resale and for operating expenses should be;a. $40,000.;b. $41,000.;c. $42,500.;d. $43,500.;Save Answer;16.;(Points: 1);Use the following to answer questions 16-20;Justin's Plant Store, a retailer, started operations on January 1. On that date, the only assets were $16,000 in cash and $3,500 in merchandise inventory. For purposes of budget preparation, assume that the company's cost of goods sold is 60% of sales. Expected sales for the first four months appear below.;Expected;Sales;January $10,000;February 24,000;March 16,000;April 25,000;The company desires that the merchandise inventory on hand at the end of each month be equal to 50% of the next month's merchandise sales (stated at cost). All purchases of merchandise inventory must be paid in the month of purchase. Sixty percent of all sales should be for cash, the balance will be on credit. Seventy-five percent of the credit sales should be collected in the month following the month of sale, with the balance collected in the following month. Variable operating expenses should be 10% of sales and fixed expenses (all depreciation) should be $3,000 per month. Cash payments for the variable operating expenses are made during the month the expenses are incurred.;In a budgeted income statement for the month of February, net income would be;a. $9,000.;b. $1,800.;c. $0.;d. $4,200.;Save Answer;17.;(Points: 1);In a budgeted balance sheet, the Merchandise Inventory on February 28 would be;a. $4,800.;b. $7,500.;c. $9,600.;d. $3,200.;Save Answer;18.;(Points: 1);The Accounts Receivable balance that would appear in the March 31 budgeted balance sheet would be;a. $15,000.;b. $16,000.;c. $8,800.;d. $12,400.;Save Answer;19.;(Points: 1);In a budget of cash receipts for March, the total cash receipts would be;a. $17,800.;b. $8,200.;c. $20,200.;d. $16,000.;Save Answer;20.;(Points: 1);In a budget of cash disbursements for March, the total cash disbursements would be;a. $11,200.;b. $13,900.;c. $22,300.;d. $16,900.;Save Answer;21.;(Points: 1);Use the following to answer questions 21-24;Information on the actual sales and inventory purchases of the Law Company for the first quarter follow;Inventory;Sales Purchases;January $120,000 $60,000;February $100,000 $78,000;March $130,000 $90,000


Paper#26175 | Written in 18-Jul-2015

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