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WorksheetsOperational Budget--Unit 34
Total questions: 60
Worksheet time: 2hrs 58mins
Management's operating & financial plans for a specified period, including budged financial reports is expressed in:
Cash Budget
Master Budget
Production Budget
Sales Budget
What is a good reason to save money?
To have money to buy things
To have money put aside for emergencies
For a future purchase
All of the above choices
A cash budget is used to determine:
profit
cash closing balance
the value of the business
the debts of the business
Is dependent on sales targets & assists in planning, coordinating & control of production:
Cash Budget
Master Budget
Production Budget
Sales Budget
Purpose of a budget is to:
identify cash in and out flows of a business
determine the actual cash on hand for a previous period
identify revenue earned for the current period
determine expenses incurred for the current period
Which of the following items are included in a cash budget?
Depreciation
Accumulated depreciation
Cash receipts
Bad debts
A business has estimated credit sales of $100,000 for April. What is the estimated cash they would receive in June if the expected collection rate is:
70% in the month following
30% in the second month
$70,000
$30,000
$100,000
A business has estimated credit sales of $200,000 for January. What is the estimated cash they would receive in February if the expected collection rate is:
70% in the month following
20% in the second month
10% in the third month
$40,000
$70,000
$140,000
$20,000
What is the purpose of a cash budget?
To get people into trouble if they overspend
To make people use spreadsheets
To see what happened to cash last year
To plan for the future
May's Closing Balance is the same as
May's Opening Balance
June's Opening Balance
June's Closing Balance
It is not the same as anything
SALES BUDGET = SALES UNIT X SELLING PRICE
TRUE
FALE
People create and keep a personal budget to help them _____.
set and reach financial goals
apply for loan
buy anything they want
earn promotions at work
A budget or a financial plan would not work if you ___________.
know how to set smart goals
are a disciplined person
wait for the end of the year to record your expenses
know how to prioritize
Rent and car insurance payments are both which type of expenses?
fixed costs that are needs
fixed costs that are wants
variable costs that are needs
variable costs that are wants
Which statement about variable expenses is true?
Variable expenses include only large costly items.
Variable expenses should not be included in the budget.
Variable expenses include wants but not needs.
Variable expenses are easier to cut than fixed expenses.
What is the main purpose of a budget?
to keep track of cash flow
to find new sources of income
to differentiate between needs and wants
to determine the amount of taxes to be paid
Lola is saving for a vacation. Based on the budget numbers here, how much can she put in her vacation account this month?
$32.00
$48.00
$112.00
$128.00
A cash budget is used to determine:
profit
cash closing balance
the value of the business
the debts of the business
A business may prepare for a cash deficit by:
reducing planned profits
reducing planned cash payments
reducing capital contributions
increasing loan payments
Purpose of a budget is to:
identify cash in and out flows of a business
determine the actual cash on hand for a previous period
identify revenue earned for the current period
determine expenses incurred for the current period
What is one advantage of preparing a cash budget?
Higher credit rating
Knowing when cash my be idle & can therefore be invested
It makes doing the business annual tax return quicker
It is quick and easy to do
Which of the following items are included in a cash budget?
Depreciation
Accumulated depreciation
Cash receipts
Bad debts
It's an advantage of budgets
Your data, when estimated, will be subject to the judgment or experience of those who determined it
Coordinate and link the activities of the organization
Coordinate the different cost centers in order to ensure that the company runs in a comprehensive manner
They facilitate administrative control
The money you start with is called the
Budget
Opening Balance
Cash
Closing Balance
A loan is included in which section of the cash budget?
The back of your wallet
Receipts
Payments
Opening Balance
Machinery purchases are put in which section?
Closing Balance
Opening Balance
Receipts
Payments
what are Fixed Costs?
They do not change with time
They keep changing
They are mixture of foxed and variable
The performance report compares
Doesnt compare any thing
Budgeted Results to budgeted amount
Actual results to Budgeted amounts.
The formula for calculating the closing balance is
SUM
Opening balance - payments
Receipts - payments
Opening balance + receipts - payments
What is standard cost?
The average unit cost of product produced by other companies.
The average unit cost of product produced in the current period.
The budgeted unit cost of product produced in a particular period.
The average unit cost of product produced in the previous period.
The estimated expenses of budgeted production refers to the:
Production cost
Budgeted cost
Standard cost
Actual cost
A document that records the standard cost of a single unit of product is known as
Materials cost card
Standard cost card
Product expense card
The master budget reflects the impact of operating decisions, but not financing decisions.
True
False
Budgeting is used to help companies:
plan to better satisfy customers
anticipate potential problems
focus on opportunities
All of these answers are correct.
Operating budgets and financial budgets:
combined form the master budget
are prepared before the master budget
are prepared after the master budget
have nothing to do with the master budget
a budget which is designed to change along with the sales volume or production levels.
zero budget
free budget
no money budget
flexible budget
process of investigating any differences between forecast data and actual figures.
variance analysis
profit centre
budget
contribution
when budgets are automatically set at zero and budget holders have to argue their case to receive any funds.
flexible budget
depreciation
zero budget
financial analysis
A plan for spending and saving. You must consider both income and expenses.
budget
banking
hoarding
investing
Budgeting is the process of creating, maintaining, or analyzing a budget in order to reduce _____________ and improve _____________
Risk, Decision Making
Outflows, Inflows
Profits, Strategy
Costs, Strategy
Favorable variances are those that
are positive
lead to lower than expected profit
lead to higher than expected profit
are unexpected
Which represents the correct answers to the chart above?
1) Adverse 2) 100 3) Favorable 4) 100,000 5) Adverse
1) Favorable 2) 100 3) Adverse 4) 120,000 5) Adverse
1) Favorable 2) 80 3) Adverse 4) 120,000 5) Favorable
1) Adverse 2) 100 3) Adverse 4) 120,000 5) Favorable
A business has estimated credit sales of $100,000 for April. What is the estimated cash they would receive in June if the expected collection rate is:
70% in the month following
30% in the second month
$70,000
$30,000
$100,000
A business has estimated credit sales of $200,000 for January. What is the estimated cash they would receive in February if the expected collection rate is:
70% in the month following
20% in the second month
10% in the third month
$40,000
$70,000
$140,000
$20,000
The two main headings of a Cash budget are
Cash Receipts and Cash Payments
Cash Receipts and Cash Credit
Cash Debit and Cash Credit
Accounts Payable and Accounts Receivable
May's Closing Balance is the same as
May's Opening Balance
June's Opening Balance
June's Closing Balance
It is not the same as anything
Which of these do not appear in a Cash Budget?
Payments
Receipts
Closing Balance
Profit
A cash budget is used to determine:
profit
cash closing balance
the value of the business
the debts of the business
The budgeting "process" includes all of the following except:
Planning
Setting
Delegating
Monitoring
Controlling
When the responsibility for budgetary control is given to less senior management
Delegated Budget
Budget Process
Incremental Budgting
Budgetary control
Type of budget in which the previous year's budget is is used as a baseline for a general increase or decrease in the budget for the coming year.
Zero Based Budget
Incremental Budget
Standard Budget
Strategic Budget
Which of the following is not a limitation of a budget?
Focused on the short term
Like other predictions, they may not be 100% accurate
May lack Flexibility
Can be time consuming to make
Requires a wide range of available financing to ensure accuracy
