ACCT 212 all powerpoints Questions and Verified
Answers
What is budgeting? Correct Answer: The process of planning future business
actions and expressing them as formal plans.
What is a budget? Correct Answer: A formal statement of a company's plans in
dollars.
What is the budgetary control process? Correct Answer: Management's use of
budgets to ensure that planned objectives are met.
List one benefit of budgeting. Correct Answer: It provides a benchmark for
evaluating performance.
How does budgeting help in coordination? Correct Answer: It coordinates the
activities of all employees and departments towards the company's overall goals.
What role does budgeting play in communication? Correct Answer: It
communicates management's specific action plans to all employees.
How can budgeting motivate employees? Correct Answer: Budgeting performance
levels provide goals for employees to attain or exceed.
What can be a potential negative outcome of budgeting? Correct Answer: It can
cause pressure on employees to meet results, potentially leading to unethical
behavior.
What is a rolling budget? Correct Answer: A budget that is continually revised by
adding a new quarterly budget to replace the quarter just elapsed.
What is included in a master budget? Correct Answer: Operating budgets, cash
budgets, and budgeted financial statements.
,What does a sales budget show? Correct Answer: Projected sales in units and dollars
for a specific period.
What is the purpose of a production budget? Correct Answer: To show the number
of units to be produced in a period based on unit sales and inventory considerations.
What does a direct materials budget indicate? Correct Answer: The budgeted costs
for direct materials needed to satisfy estimated production for the period.
What is the direct labor budget based on? Correct Answer: The production budget.
What does the factory overhead budget show? Correct Answer: The budgeted costs
for factory overhead needed to complete the estimated production for the period.
What is the variable portion of factory overhead assigned at? Correct Answer: $2.50
per unit of production.
What is the significance of budget evaluations? Correct Answer: They offer
opportunities to explain differences between actual and budgeted amounts.
What is the impact of employee involvement in budgeting? Correct Answer: When
employees affected by the budget help prepare it, it can lead to better motivation
and commitment.
What is the relationship between the sales budget and production budget? Correct
Answer: The production budget is based on the unit sales projected in the sales
budget.
What does the cash budget outline? Correct Answer: The expected cash inflows and
outflows for a specific period.
How does budgeting affect human behavior? Correct Answer: It can be a motivating
force or create pressure leading to unethical behavior.
What is the purpose of budget reporting? Correct Answer: To communicate
financial performance and variances from the budget.
,What is a master budget? Correct Answer: A comprehensive financial plan that
includes all aspects of a company's operations.
What is the role of budgeted financial statements? Correct Answer: To project the
expected financial position and performance of the company.
What is the fixed overhead cost per month? Correct Answer: $1,500 per month.
How many units does TSC assume it will normally produce each quarter? Correct
Answer: 3,000 units.
What is the fixed overhead cost per unit for TSC? Correct Answer: $1.50 per unit.
What budgets are prepared using the product cost per unit? Correct Answer: Cost of
goods sold budget and budgeted income statement.
What percentage of total sales does TSC pay in sales commissions? Correct Answer:
10 percent.
What is the monthly salary of TSC's sales manager? Correct Answer: $2,000.
What are the general and administrative salaries for Toronto Sticks Company?
Correct Answer: $54,000 per year or $4,500 per month.
What does the capital expenditures budget report? Correct Answer: Expected cash
receipts and cash payments related to the sale and purchase of plant assets.
What does the cash budget show? Correct Answer: Budgeted cash receipts and cash
payments during the budget period.
What percentage of each month's sales are cash sales for TSC? Correct Answer: 40
percent.
What is the accounts receivable balance at the end of each month for TSC? Correct
Answer: 60% of that month's budgeted sales.
, What is included in the budgeted income statement? Correct Answer: All
information from the component budgets, including predicted income tax expense
computed as 40% of budgeted pretax income.
What is the purpose of the direct labor budget? Correct Answer: To analyze revenue
per employee for a service firm.
What is the key difference in budgeting for service companies compared to
manufacturing companies? Correct Answer: Service providers typically need fewer
operating budgets than manufacturers.
What is the general layout for the merchandise purchases budget in equation form?
Correct Answer: It determines the budgeted number of units to be purchased by
subtracting beginning inventory.
What should the ending inventory for a month equal in units? Correct Answer:
90% of next month's unit sales.
What is the focus of Learning Objective P1? Correct Answer: To prepare the
operating budgets of a master budget for a manufacturing company.
What is the focus of Learning Objective P2? Correct Answer: To prepare a cash
budget for a manufacturing company.
What is the focus of Learning Objective P3? Correct Answer: To prepare budgeted
financial statements.
What is the focus of Learning Objective A1? Correct Answer: To prepare a direct
labor budget for a service firm and analyze revenue per employee.
What is the focus of Learning Objective P4? Correct Answer: To prepare each
component of a master budget for a merchandising company.
What is a flexible budget? Correct Answer: A budget based on more than one
amount of sales or other activity measure.
Answers
What is budgeting? Correct Answer: The process of planning future business
actions and expressing them as formal plans.
What is a budget? Correct Answer: A formal statement of a company's plans in
dollars.
What is the budgetary control process? Correct Answer: Management's use of
budgets to ensure that planned objectives are met.
List one benefit of budgeting. Correct Answer: It provides a benchmark for
evaluating performance.
How does budgeting help in coordination? Correct Answer: It coordinates the
activities of all employees and departments towards the company's overall goals.
What role does budgeting play in communication? Correct Answer: It
communicates management's specific action plans to all employees.
How can budgeting motivate employees? Correct Answer: Budgeting performance
levels provide goals for employees to attain or exceed.
What can be a potential negative outcome of budgeting? Correct Answer: It can
cause pressure on employees to meet results, potentially leading to unethical
behavior.
What is a rolling budget? Correct Answer: A budget that is continually revised by
adding a new quarterly budget to replace the quarter just elapsed.
What is included in a master budget? Correct Answer: Operating budgets, cash
budgets, and budgeted financial statements.
,What does a sales budget show? Correct Answer: Projected sales in units and dollars
for a specific period.
What is the purpose of a production budget? Correct Answer: To show the number
of units to be produced in a period based on unit sales and inventory considerations.
What does a direct materials budget indicate? Correct Answer: The budgeted costs
for direct materials needed to satisfy estimated production for the period.
What is the direct labor budget based on? Correct Answer: The production budget.
What does the factory overhead budget show? Correct Answer: The budgeted costs
for factory overhead needed to complete the estimated production for the period.
What is the variable portion of factory overhead assigned at? Correct Answer: $2.50
per unit of production.
What is the significance of budget evaluations? Correct Answer: They offer
opportunities to explain differences between actual and budgeted amounts.
What is the impact of employee involvement in budgeting? Correct Answer: When
employees affected by the budget help prepare it, it can lead to better motivation
and commitment.
What is the relationship between the sales budget and production budget? Correct
Answer: The production budget is based on the unit sales projected in the sales
budget.
What does the cash budget outline? Correct Answer: The expected cash inflows and
outflows for a specific period.
How does budgeting affect human behavior? Correct Answer: It can be a motivating
force or create pressure leading to unethical behavior.
What is the purpose of budget reporting? Correct Answer: To communicate
financial performance and variances from the budget.
,What is a master budget? Correct Answer: A comprehensive financial plan that
includes all aspects of a company's operations.
What is the role of budgeted financial statements? Correct Answer: To project the
expected financial position and performance of the company.
What is the fixed overhead cost per month? Correct Answer: $1,500 per month.
How many units does TSC assume it will normally produce each quarter? Correct
Answer: 3,000 units.
What is the fixed overhead cost per unit for TSC? Correct Answer: $1.50 per unit.
What budgets are prepared using the product cost per unit? Correct Answer: Cost of
goods sold budget and budgeted income statement.
What percentage of total sales does TSC pay in sales commissions? Correct Answer:
10 percent.
What is the monthly salary of TSC's sales manager? Correct Answer: $2,000.
What are the general and administrative salaries for Toronto Sticks Company?
Correct Answer: $54,000 per year or $4,500 per month.
What does the capital expenditures budget report? Correct Answer: Expected cash
receipts and cash payments related to the sale and purchase of plant assets.
What does the cash budget show? Correct Answer: Budgeted cash receipts and cash
payments during the budget period.
What percentage of each month's sales are cash sales for TSC? Correct Answer: 40
percent.
What is the accounts receivable balance at the end of each month for TSC? Correct
Answer: 60% of that month's budgeted sales.
, What is included in the budgeted income statement? Correct Answer: All
information from the component budgets, including predicted income tax expense
computed as 40% of budgeted pretax income.
What is the purpose of the direct labor budget? Correct Answer: To analyze revenue
per employee for a service firm.
What is the key difference in budgeting for service companies compared to
manufacturing companies? Correct Answer: Service providers typically need fewer
operating budgets than manufacturers.
What is the general layout for the merchandise purchases budget in equation form?
Correct Answer: It determines the budgeted number of units to be purchased by
subtracting beginning inventory.
What should the ending inventory for a month equal in units? Correct Answer:
90% of next month's unit sales.
What is the focus of Learning Objective P1? Correct Answer: To prepare the
operating budgets of a master budget for a manufacturing company.
What is the focus of Learning Objective P2? Correct Answer: To prepare a cash
budget for a manufacturing company.
What is the focus of Learning Objective P3? Correct Answer: To prepare budgeted
financial statements.
What is the focus of Learning Objective A1? Correct Answer: To prepare a direct
labor budget for a service firm and analyze revenue per employee.
What is the focus of Learning Objective P4? Correct Answer: To prepare each
component of a master budget for a merchandising company.
What is a flexible budget? Correct Answer: A budget based on more than one
amount of sales or other activity measure.
