Font size
WorksheetsBUDGETS (PFF) - WEEK 2
Total questions: 25
Worksheet time: 25mins
A budget is a plan for spending and saving money.
True
False
Why is it important to keep a budget?
Budgets make sure you do not spend more money than you can afford.
Budgets can help you save for large purchases.
Budgets show you how much money you get and spend.
All of the above.
The sales budget is prepared in advance and is the basis for the preparation of other budgets, therefore the sales budget is called?
(a)
A business may prepare for a cash deficit by:
reducing planned profits
reducing planned cash payments
reducing capital contributions
increasing loan payments
A cash budget is used to determine:
profit
cash closing balance
the value of the business
the debts of the business
This budget shows the units that must be produced to meet anticipated sales.
Direct materials
Master
Sales
Production
Who is responsible for the budget?
Accountants
Shareholders
Investors
Management
When calculating a production budget, which figure comes first?
Sales
Opening Inventory
Closing Inventory
If the Closing Inventory balance is 500 for February, what is the Opening Inventory of March?
(a)
The Closing Inventory of one month is the same as the Opening Inventory of the previous month. True or False
True
False
The sales of January are 4,000. The opening inventory is 550. and the closing inventory is 600. What is the production budget in units for that month? (use a comma separator)
(a)
The sales of January are 4,000. The opening inventory is 550. and the closing inventory is 600. What is the production budget in units for that month? (use a comma separator)
(a)
The sales of April are 7,000. The opening inventory is 820. and the closing inventory is 650. What is the production budget in units for that month? (use a comma separator)
(a)
The production units in May is 4,800. The opening inventory is 650 and the closing inventory is 700. What is the sales budget in units for that month? (use a comma separator)
(a)
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
The formula for calculating the closing balance is
SUM
Opening balance - payments
Receipts - payments
Opening balance + receipts - payments
The purpose of a cash budget is
to forecast when there will be surplus cash
to forecast when there will be a deficit
to have something fun to do
to use your calculator
What is a deficit?
When you haven't completed a cash budget
When you can see that you will have extra money this month
When you forecast that you will have extra money to spend
When you forecast that you will be short of money
Is depreciation on non-current asset included in the Cash Budget?
Yes
No
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 figure should be shown in the Payments section of the cash budget?
Which of the following is a non-cash expense?
Rent
Electricity
Depreciation
Wages
