?Which of the following statements is false about budgeted income statement and budgeted balance sheet .None of the given answers .a O The cash budget must be prepared first before preparing both the budgeted income statement and the .b O .budgeted balance sheet The ending finished goods inventory will be included in the budgeted balance sheet .c O The budgeted balance sheet must be prepared first before preparing the budgeted income statement .d O .Credit purchases will be included in the accounts payable in the budgeted balance sheet .e O

?Which of the following statements is false about budgeted income statement and budgeted balance sheet .None of the given answers .a O The cash budget must be prepared first before preparing both the budgeted income statement and the .b O .budgeted balance sheet The ending finished goods inventory will be included in the budgeted balance sheet .c O The budgeted balance sheet must be prepared first before preparing the budgeted income statement .d O .Credit purchases will be included in the accounts payable in the budgeted balance sheet .e O

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 11MC: Which of the following statements is not correct? A. The sales budget is computed by multiplying...

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The percentage of accounts receivable that is uncollectible can be ignored for cash budgeting because a. no cash is received from an account that defaults. b. it is included in cash sales. c. it appears on the budgeted income statement. d. for most companies, it is not a material amount. e. None of these.
Suppose that the vice president of sales is a particularly pessimistic individual. If you were in charge of developing the master budget, how, if at all, would you be influenced by this knowledge?
Select the one budget below that is not an operating budget. a. Cost of goods sold budget b. Cash budget c. Production budget d. Overhead budget e. All of these.
Which of the following statements is false about budgeted income statement and budgeted balance sheet ? a . The ending finished goods inventory will be included in the budgeted balance sheet . b. None of the given answers . c . The budgeted income statement must be prepared first before preparing the budgeted balance sheet . d. Credit purchases will be included in the accounts payable in the budgeted balance sheet. e. The cash budget must be prepared first before preparing both the budgeted income statement and the budgeted balance sheet.
Which of the following statements is incorrect concerning budget preparation? A. The rolling budget approach is not often used in practice because it requires that management be in perpetual budgeting mode. B. If a zero-based budgeting approach is used, the annual budgeting process begins with a review of the results of the prior operating period. C. If a participative approach is used to prepare budgets, all levels of management are involved in the budgeting process. D. The preparation of the sales budget is the starting point in the budgeting process for all companies. E. Participative budgeting increases the risk that employees will create budgetary slack.
Which of the following statements is True? a. Budget data are generally prepared by top management and distributed downward in anorganization b. The budget committee is responsible for preparing detailed budget figures in anorganization c. The primary purpose of the cash budget is to show the expected cash balance at the endof the budget period. d. Under zero-based budgeting, a manager is required to start at zero budget levels each period, as if the programs involved were being initiated for the first time
Which of the following statements about budgeting is incorrect? a. Budgets provide direction and coordination b. Budgets motivate staff c. A budget is a financial plan. d. A budget looks back and review performance.
Which of the following statements is false ? a. None of the given answers . b. For merchandising companies , a separate purchase budget would be prepared for each item carried in stock c. The interest expense in the budgeted income statement comes from the cash budget . d. We should prepare production budget before we prepare the sales budget . e. If a company produces and sells customized goods only by order , it may not have any desired ending finished goods inventory when preparing its budgets .
Which of the following is true with respect to the sales budget? Group of answer choices It provides sales data to prepare the budgeted income statement. It captures the variable and fixed expenses of the business. It has no relation with the production budget. It provides sales data to prepare income statements for stockholders and creditors.
Which of the following statements concerning budget preparation for a merchandiser is correct? A. Operating expenses differ from operating cash outflows solely as a result of timing differences between when an expense is incurred and when an expense is paid. B. Only an understanding of cost behavior is required to prepare an operating expense budget. C. If a company requires its ending inventory to equal a certain percentage of the cost of next month’s sales, the company would be able to prepare purchases budgets for 4 months if it only knew the cost of sales for those 4 months. D. Assuming only a portion of a company’s sales are made on account, bad debt expense under the income statement method is calculated by multiplying sales on account by the estimated uncollectible percentage. E. None of the above statements are correct.
Which of the following statements is not correct? The revenue budget is the starting point in preparing the master budget. The revenue budget is constructed by multiplying the expected sales in units by the sales price. The production budget is not based on the revenue budget. The cash budget is used to determine whether the firm will have enough cash on hand.
Briefly describe human behavior problems that might arise if budget goals are set too tightly. What behavioral problems are associated with setting a budget too loosely? When would a company use zero-based budgeting? Why should the production requirements outlined in the production budget be carefully coordinated with the sales budget?