BU247 MANAGERIAL ACCOUNTING EXAM CH. 10
PRACTICE EXAM QUESTIONS WITH VERIFIED
ANSWERS LATEST UPGRADE
Budgeting does NOT require:
a. Knowledge of the organization's activities.
b. Specialized expertise in financial management and control.
c. Knowledge about how activities affect costs.
d. The ability to see how the organization's different activities fit
together. --CORRECT ANSWER--B
All of the following are true statements about the role of budgets and
budgeting EXCEPT that:
a. A budget is a quantitative summary of the expected allocations and
financial consequences of the organization's short-term operating
activities.
b. Budgeting includes the process of estimating money inflows and
outflows to determine a financial plan that will meet an organization's
objectives.
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,c. The difference between actual results and the budget plan are called
variances.
d. Budgeting solves most business challenges because it coordinates
activities and communicates the organization's short-term goals to its
members. --CORRECT ANSWER--D
In regard to the amount of detail, a budget should:
a. Show the detail for each product.
b. Group products into pools of products.
c. Strike a balance between detail and aggregated information.
d. Not consider the cost of gathering the information. --CORRECT
ANSWER--C
If initial budgets prove unacceptable, planners achieve the MOST
benefit from:
a. Repeating the budgeting cycle with a new set of decisions.
b. Deciding not to budget this year.
c. Accepting an unbalanced budget.
d. Using last year's budget. --CORRECT ANSWER--A
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,When discussing the roles of budgets, a planning role in the budgeting
process includes:
a. Measuring outcomes against planned amounts.
b. Developing the master budget.
c. Assessing performance.
d. Reporting actual amounts at the end of the budgeting period. --
CORRECT ANSWER--B
When discussing the roles of budgets, a control role includes:
a. Identifying organizational objectives and short-term goals.
b. Developing long-term strategies and short-term plans.
c. Measuring and assessing performance against budgeted amounts.
d. Developing the master budget. --CORRECT ANSWER--C
The usual starting point in budgeting is to make a forecast of
production. --CORRECT ANSWER--False
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, The production plan should be based on the sales plan. --CORRECT
ANSWER--True
If amounts in the sales forecast change, amounts in the production
budgets will also change. --CORRECT ANSWER--True
The first step in developing a budget is for the accounting department
to prepare the sales forecast. --CORRECT ANSWER--False
Operating budgets and financial budgets:
a. Combined form the master budget.
b. Are prepared before the master budget.
c. Are prepared after the master budget.
d. Have nothing to do with the master budget. --CORRECT
ANSWER--A
Operating budgets include all of the following EXCEPT:
a. A sales plan.
b. A labor hiring and training plan.
c. An administrative and discretionary spending plan.
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PRACTICE EXAM QUESTIONS WITH VERIFIED
ANSWERS LATEST UPGRADE
Budgeting does NOT require:
a. Knowledge of the organization's activities.
b. Specialized expertise in financial management and control.
c. Knowledge about how activities affect costs.
d. The ability to see how the organization's different activities fit
together. --CORRECT ANSWER--B
All of the following are true statements about the role of budgets and
budgeting EXCEPT that:
a. A budget is a quantitative summary of the expected allocations and
financial consequences of the organization's short-term operating
activities.
b. Budgeting includes the process of estimating money inflows and
outflows to determine a financial plan that will meet an organization's
objectives.
Page 1 of 40
,c. The difference between actual results and the budget plan are called
variances.
d. Budgeting solves most business challenges because it coordinates
activities and communicates the organization's short-term goals to its
members. --CORRECT ANSWER--D
In regard to the amount of detail, a budget should:
a. Show the detail for each product.
b. Group products into pools of products.
c. Strike a balance between detail and aggregated information.
d. Not consider the cost of gathering the information. --CORRECT
ANSWER--C
If initial budgets prove unacceptable, planners achieve the MOST
benefit from:
a. Repeating the budgeting cycle with a new set of decisions.
b. Deciding not to budget this year.
c. Accepting an unbalanced budget.
d. Using last year's budget. --CORRECT ANSWER--A
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,When discussing the roles of budgets, a planning role in the budgeting
process includes:
a. Measuring outcomes against planned amounts.
b. Developing the master budget.
c. Assessing performance.
d. Reporting actual amounts at the end of the budgeting period. --
CORRECT ANSWER--B
When discussing the roles of budgets, a control role includes:
a. Identifying organizational objectives and short-term goals.
b. Developing long-term strategies and short-term plans.
c. Measuring and assessing performance against budgeted amounts.
d. Developing the master budget. --CORRECT ANSWER--C
The usual starting point in budgeting is to make a forecast of
production. --CORRECT ANSWER--False
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, The production plan should be based on the sales plan. --CORRECT
ANSWER--True
If amounts in the sales forecast change, amounts in the production
budgets will also change. --CORRECT ANSWER--True
The first step in developing a budget is for the accounting department
to prepare the sales forecast. --CORRECT ANSWER--False
Operating budgets and financial budgets:
a. Combined form the master budget.
b. Are prepared before the master budget.
c. Are prepared after the master budget.
d. Have nothing to do with the master budget. --CORRECT
ANSWER--A
Operating budgets include all of the following EXCEPT:
a. A sales plan.
b. A labor hiring and training plan.
c. An administrative and discretionary spending plan.
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