Budgeting

Company A is preparing budgets for the 12 months ending 31 March 2025. It assumes that customers have a 2 month credit period. In the budgeted balance sheet at 31 March 2025, the trade receivables figure will be:

• Credit sales for March 2025

• Credit sales for February 2025

• Credit sales for February and March 2025

• Zero

In which budget would you find closing inventory of finished goods in units?

• Production budget
• Raw materials purchases budget

• Budgeted income statement

• Budgeted balance sheet

Which budget does not show monetary amounts?

• Cash budget

• Production budget

• Labour budget

• Sales budget

Which of the following would be found in the cash budget for March?

• Receipts from March cash sales

• Receipts from March credit sales (1 month’s credit)

• Receipts from February’s credit sales (1 month’s credit)

• Bank loan received in March

• Receipts from share capital issued in March

Which of the following transactions impact budgeted profit but not budgeted cash?

• Depreciation

• Write off of obsolete inventory

• Management bonuses

• Credit purchases not budgeted to be paid until after the current budget period

Which transactions impact the cash budget but not budgeted profit?

• Loan repayments

• Purchase of a new machine

• Wages

• New share capital

Which of the following would improve a budgeted cash position?

• Negotiating longer credit period with suppliers

• Negotiating longer credit period with customers

• Paying for capital expenditure in instalments

• Leasing equipment rather than buying outright

• Extending the repayment terms of an existing bank loan

In which budget would you find finished goods of raw materials (in units)

• Production budget

• Budgeted balance sheet

• Cash budget

• Raw materials purchases budget

In which 2 budgets would you find the value of closing inventory?

• Budgeted income statement and budgeted balance sheet
• Budgeted income statement and production budget

• Production budget and cash budget

• Production buget and budgeted balance sheet

What does a flexed budget show?

• Original budgeted sales and expenses flexed to reflect actual activity levels

• Original budgeted sales and expenses all multiplied by a new standard cost

• Actual sales and costs

• A range of budgeted sales and expenses for different assumptions