ACCT. Chapter 7 Quiz – Flashcards

Expressing plans for a business in financial terms is commonly called: a. Operational planning. b. Strategic planning. c. Budgeting. d. Master planning.

Budgeting that involves the development of a master budget to direct the firm's activities over the short-term is referred to as: a. Operations budgeting. b. Capital budgeting. c. Strategic planning. d. None of the other answers are correct.

The master budget normally covers: a. 1 year. b. Six months. c. 3-5 years. d. 1-3 years.

Which of the following would represent the order in which most master budgets are prepared? a. Sales, Income Statement, Cash, Purchases b. Sales, Purchases, Cash, Income Statement c. Purchases, Cash, Sales, Income Statement d. Purchases, Sales, Cash, Income Statement

Which of the following budgets would be prepared by a manufacturing company but not a merchandising company? a. Cost of goods sold budget b. Sales budget c. Raw materials budget d. Selling and administrative expense budget

Which of the following items is not needed to prepare an inventory purchases budget for a merchandising business? a. Desired ending inventory b. Expected sales c. Expected unit selling price d. Beginning inventory

Select the correct equation format for the purchases budget. a. Beginning inventory + expected sales - desired ending inventory = required purchases. b. Expected sales + desired ending inventory = required purchases. c. Expected sales + desired ending inventory - beginning inventory = required purchases. d. Beginning inventory + expected sales = required purchases.

Which of the following would appear on a selling and administrative expense budget, but would not appear on a schedule of cash payments for selling and administrative expenses? a. Depreciation expense b. Cost of goods sold c. Salary expense d. Sales expense

Which of the following items typically found on the selling and administrative expense budget will also impact the cash budget? a. All of the other answers are correct. b. Administrative salaries c. Advertising expense d. Utilities