Untitled Quiz

For a company that does not have resource limitations in what sequence would the budgets be prepared? 1. cash budget 4. production budgets 2. sales budget 5. purchase budgets 3. inventory budgets

• a. sequence 2, 3, 4, 5 and 1

• b. sequence 2, 3, 4,1 and 5

• c. sequence 2, 4, 3, 5 and 1

• d. sequence 4, 3, 2, 1 and 5

In zero-based budgeting, which of the following statements are True? 1. All activities in the company are organized into break-up units called packages. 2. All costs have to be justified ever budgeting period. 3. The process is not time consuming since justification of costs can be done as a routine matter

• a. All three statements.

• b. Statements 1 and 2 only.

• c. Statement 1 only.

• d. Statement 2 and 3 only

In budgeting, which of the following statements is false?

• a. Budgeting provides a measuring device to which subsequent performances are compared and evaluated.

• b. Planning and control are the essential features of the budgeting process

• c. Budget preparation is not the sole responsibility of any one department and is prepared by combining the efforts of many individuals

• d. Capital expenditures budget shows the availability of idle cash for investment

Which of the following statements is True?

• a. Under zero-based budgeting, a manager is required to start at zero budget levels each period, as if the programs involved were being initiated for the first time.

• b. The primary purpose of the cash budget is to show the expected cash balance at the end of the budget period.

• c. Budget data are generally prepared by top management and distributed downward in an organization

• d. The budget committee is responsible for preparing deta

A budget that includes a 12-month planning period at all times is called a __________ budget

• a. pro forma

• b. flexible

• c. master

• d. continuous

A budget that is expressed in units of materials, number of employees, or number of man-hours or service units rather than in pesos is known as

• a. Planning budget

• b. Progressive budget

• c. Physical budget

• d. Traditional budget

Budgeting expenditures by purpose is called

• a. Program budgeting

• b. Zero-based budgeting.

• c. Line budgeting.

• d. Flexible budgeting

The procedure for setting profit objectives in which management specifies a given rate of return that it seeks to realize in the long run by means of planning toward that end is the:

• A. a priori method

• B. ad hoc method

• C. pragmatic method

• D. theoretical method

Activity-based budgeting includes all the following steps EXCEPT

• a. determining demands for activities from sales and production targets.

• b. computing the cost of performing activities.

• c. determining a separate cost-driver rate for each department.

• d. describing the budget as costs of activities rather than costs of functions

A systematized approach known as zero-based budgeting (ZBB)

• a. Presents planned activities for a period of time but does not present a firm commitment

• b. Divides the activities of individual responsibility centers into a series of packages that are prioritized.

• c. Classifies the budget by the prior year’s activity and estimates the benefits arising from each activity.

• d. Commences with the current level of spending.