FINANCIAL+MANAGERIAL ACCOUNTING
9th Edition
ISBN: 9781264560295
Author: Wild
Publisher: MCG
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Match the definitions 1 through 8 with the term or phrase a through h. a. Budget e. Master budget b. Top-down budgeting f. Budgetary slack c. Participatory budgeting g. Sales budget d. Cash budget h. Budgeted income statement 1. Shows expected cash inflows and outflows and helps determine financing needs. 2. A plan showing units to be sold; the usual starting point in the master budget process. 3. A report that shows predicted revenues and expenses for a budgeting period. 4. A formal statement of future plans, usually expressed in monetary terms. 5. Approach in which top management passes down a budget without employee input. 6. A budgetary cushion used to meet performance targets. 7. A comprehensive business plan that includes operating, investing, and financing budgets. 8. Employees affected by a budget help in preparing it.
Select each of the terms with the best description of its purpose.
1. Helps determine financing needs.
Definitions
2. The usual starting point in the master budget process.
3. A report that shows predicted revenues and expenses for a budgeting period.
4. A budgetary cushion used to meet performance targets.
5. A comprehensive plan that consists of several budgets that are linked.
6. Employees affected by a budget help in preparing it.
Terms
Which of the following is NOT true of the budgeting process?
Question 8 options:
Budgeting provides feedback to management to aid in assessing how well it's reaching its goals.
Budgets force managers to plan for the future.
Budgets force managers to consider relations among operations across the entire value chain.
The performance report is prepared as part of the master budget.
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- Which budget evaluates the results of operations at the actual level of activity? capĂtal budget cash budget flexible budget static budgetarrow_forwardWhich of the operating budgets is prepared first? A. production budget B. sales budget C. cash received budget D. cash payments budgetarrow_forwardWhich of the following includes only financial budgets? capital asset budget, budgeted income statement, sales budget production budget, capital asset budget, budgeted balance sheet cash budget, budgeted balance sheet, capital asset budget budgeted income statement, direct material purchases budget, cash budgetarrow_forward
- A company has prepared the operating budget and the cash budget. It is now preparing the budgeted balance sheet. Identify the document that contains each of these balances. A. cash B. accounts receivable C. finished goods inventory D. accounts payable E. equipment purchasesarrow_forwardIdentify the document that contains the information listed in these lines from the budgeted balance sheet shown. Cash Accounts receivable Raw materials inventory Computers Accounts payablearrow_forwardWhich approach requires management to justify all its expenditures? A. bottom-up approach B. zero-based budgeting C. master budgeting D. capital allocation budgetingarrow_forward
- Why is a clear understanding of managements goals and objectives necessary for effective budgets?arrow_forwardWhich of the following describes the order in which the four types of budgets must be prepared? a. Production, sales, direct materials purchases, cash received on account b. Sales, production, direct materials purchases, cash budget c. Cash receipts, direct labor, production, sales d. Sales, direct materials purchases, production, cash disbursementsarrow_forwardPrepare a budgeted income statement using the information shown.arrow_forward
- Explain how a budgeted income statement for a service business may be used for both planning and control purposes.arrow_forwardIf management is being evaluated on their ability to manage a budget, what can they do to increase cash flow?arrow_forwardThe direct materials budget is prepared using which budgets information? A. cash payments budget B. cash receipts budget C. production budget D. raw materials budgetarrow_forward
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