Ch9 practice problemsfgv

Ch9 practice problemsfgv - Chapter 9 Practice Problems 1....

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Chapter 9 Practice Problems 1. Which of the following budgets are prepared before the sales budget? A. Choice A B. Choice B C. Choice C D. Choice D Answer: 2. The master budget process usually begins with the: A. production budget. B. operating budget. C. sales budget. D. cash budget. Answer: 3. 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. Answer: 4. 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. Answer: 5. The concept of responsibility accounting means that: A. Budgetary data should be reviewed and approved by the budget committee.
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B. Budgetary data should be reviewed and approved by all levels of management. C. An employee's performance should be evaluated only on those items under his or her control. D. An employee's performance should be evaluated only by his or her immediate supervisor. Answer: 6. There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? A. It details the required direct labor hours. B. It details the required raw materials purchases. C. It is calculated based on the sales budget and the desired ending inventory. D. It summarizes the costs of producing units for the budget period. Answer: 7. Parlee Company's sales are 30% in cash and 70% on credit. Sixty % of the credit sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data: Total cash receipts in April would be budgeted to be: A. $38,900 B. $47,900 C. $27,230 D. $36,230 8. 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:
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Ch9 practice problemsfgv - Chapter 9 Practice Problems 1....

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