it has top management support

A budget is most likely to be effective if

accounts receivable
Of the following items, which one is not obtained from an individual operating budget?
the budgeted income statement is prepared after the financial budgets are prepared
Which of the following statements about a budgeted income statement is not true?
budgeted balance sheet
the projection of financial position at the end of the budget period is found on the
depreciation expense
which of the following items would never appear on a cash budget
budget committee
coordinating the preparation of the budget is the responsibility of the
control overhead cost
the purpose of the departmental overhead cost report is to
master budget
another name for the static budget is
fixed manufacturing overhead
which of the following would be the same total amount on a flexible budget and static
budget if the activity level is different for the two types of budget
substantial variable cost
a static budget is not appropriate in evaluating a manager's effectiveness if a company
has

An unrealistic budget is more likely to result when it

has been developed in a top down fashion.
In many companies, responsibility for coordinating the preparation of the budget is
assigned to
a budget committee.
Which of the following statements about budget acceptance in an organization is true?
Budgets have a greater chance of acceptance if all levels of management have
provided input into the budgeting process.
Which of the following is not a proper match-up?
Budgeting ¨ Long-term goals
Budget development for the coming year usually starts
several months before the end of the current year.
Which one of the following items would never appear on a cash budget?
Depreciation expense
Top management notices a variation from budget and an investigation of the difference
reveals that the department manager could not be expected to have controlled the
variation. Which of the following statements is applicable?
Department managers should only be held accountable for controllable variances for
their departments.
An overly optimistic sales budget may result in
excessive inventories.
The cash budget reflects
expected cash receipts and cash disbursements from all sources.
The budget committee would not normally include the
external auditor.
Which of the following statements about a budgeted income statement is not true?
The budgeted income statement is prepared after the financial budgets are prepared.
A purchases budget is used instead of a production budget by
merchandising companies.
A master budget consists of
interrelated financial budgets and operating budgets.
Which one of the following is not needed in preparing a production budget?
Budgeted raw materials
Which of the following is done to improve the reliability of the sales forecast?
Employ financial planning models
A common starting point in the budgeting process is
past performance.
The direct materials and direct labor budgets provide information for preparing the
cash budget.
Long-range planning usually encompasses a period of at least
5 years.
Which of the following does not appear as a separate section on the cash budget?
Capital expenditures
Which of the following statements is incorrect?
The production budget is derived from the direct materials and direct labor budgets.
Which of the following is not a financial budget?
Manufacturing overhead budget
The financial budgets include the
cash budget and the budgeted balance sheet.
It is important that budgets be accepted by
All of these.
Of the following items, which one is not obtained from an individual operating budget?
Accounts receivable
Which of the following items does not follow from the adoption of a budget?
Guarantee of accomplishing the profit objective
A critical factor in budgeting for a service firm is to
coordinate professional staff needs with anticipated services.
Which of the following would not appear as a fixed expense on a selling and
administrative expense budget?
Freight-out
For a merchandiser, the starting point in the development of the master budget is the
sales budget.
Which one of the following is a problem resulting from a service company being
overstaffed?
cash budget and the budgeted balance sheet.
The important end-product of the operating budgets is the
budgeted income statement.
If budgets are to be effective, there must be
an organizational structure with clearly defined lines of authority and responsibility.
Instead of a production budget, a merchandiser will prepare a
merchandise purchases budget.
A sales forecast
shows forecasts for the industry and for the firm.
Hyde Corp.'s cash budget showed total available cash less cash disbursements. What
does this amount equal?
The excess of available cash over cash disbursements
Beginning cash balance plus total receipts
equals total available cash.
A budget
is an aid to management.
Orange Co. is a manufacturer and Pineapple Company is a merchandiser. What is the
difference in the budgets the two entities will prepare?
Orange Co. will prepare a production budget, and Pineapple Company will prepare a
merchandise purchases budget.
The total direct labor hours required in preparing a direct labor budget are calculated
using the
production budget.
Long-range planning
generally encompasses a longer period of time than an annual budget.
Which one of the following sections would not appear on a cash budget?
Investing
The formula for determining budgeted merchandise purchases is budgeted
cost of goods sold + desired ending inventory - beginning inventory.
Budgeting is usually most closely associated with which management function?
Planning
A budget is most likely to be effective if
it has top management support.
The primary benefits of budgeting include all of the following except it
requires only top management to plan ahead and formalize their future goals.
The cash budget reflects
expected cash receipts and cash disbursements from all sources.