Practice Exam 2
The master budget consists of various types of budgets within it.
Which of the
following represents the correct order of budgets within the master budget?
a.) Sales, purchases, cash
b.) Sales, selling and administrative, purchases
c.) Purchases, cash, sales
d.) Balance sheet, purchases, sales
The budget that portrays twelve months of operations is the:
Eastern Carolina Corporation is a merchandising firm.
Information pertaining to
the company’s sales revenue is presented in the following table:
All purchases of inventory are on account; 38% are paid in the month of purchase,
and the remainder is paid in the month following the purchase.
estimates that 75% of credit sales will be collected in the month of sale, 15% will
be collected in the month following the sale, and the remainder to be written-off
in the month following the sale.
Required purchases are equal to 45% of the next
month’s total sales.
Eastern Carolina’s budgeted total cash receipts for August are
Frankie’s Amazing Hotdogs has the following budgeted sales:
The regular pattern of collection of credit sales is 25% in the month of sale, 68%
in the month following the sale, and the remainder in the second month following
the month of sale.