Accounting 231 WSU (Exam 3) ch. 8 &
9 Questions with complete solution
2025/2026
budget - correct answer ✔a detailed plan for the future that is usually expressed in formal quantitative
terms
cash budget - correct answer ✔a detailed plan showing how cash resources will be acquired and used
over a specific time period
continuous budget (perpetual budget) - correct answer ✔a 12-month budget that rolls forward one
month as the current month is completed
Control - correct answer ✔the process of gathering feedback to ensure that a plan is being properly
executed or modified as circumstances change
Direct Labor Budget - correct answer ✔a detailed plan that shows the direct labor-hours required to
fulfill the production budget and to provide for adequate inventories
ending finished goods inventory budget - correct answer ✔a budget showing the dollar amount of
unsold finished goods inventory that will appear on the ending balance sheet
Manufacturing Overhead Budget - correct answer ✔A detailed plan showing the production costs,
other than direct materials and direct labor, that will be incurred over a specified time period.
Master Budget - correct answer ✔A number of separate but interdependent budgets that formally lay
out the company's sales, production, and financial goals and that culminates in a cash budget, budgeted
income statement, and budgeted balance sheet.
, merchandise purchases budget - correct answer ✔a detailed plan used by a merchandising company
that shows the amount of goods that must be purchased from suppliers during the period
participated / self-imposed budget - correct answer ✔A method of preparing budgets in which
managers prepare their own budgets. These budgets are then reviewed by higher-level managers, and
any issues are resolved by mutual agreement.
planning - correct answer ✔the process of establishing goals and specifying how to achieve them
production budget - correct answer ✔a detailed plan showing the number of units that must be
produced during a period in order to satisfy both sales and inventory needs
Responsibility Accounting - correct answer ✔A system of accountability in which managers are held
responsible for those items of revenue and cost—and only those items—over which they can exert
significant control. The managers are held responsible for differences between budgeted and actual
results.
Sales Budget - correct answer ✔a detailed schedule showing expected sales expressed in both dollars
and units
selling and administrative expense budget - correct answer ✔A detailed schedule of planned expenses
that will be incurred in areas other than manufacturing during a budget period.
flexible budget - correct answer ✔A report showing estimates of what revenues and costs should have
been, given the actual level of activity for the period.
labor efficiency variance - correct answer ✔The difference between the actual hours taken to complete
a task and the standard hours allowed for the actual output, multiplied by the standard hourly labor
rate.
9 Questions with complete solution
2025/2026
budget - correct answer ✔a detailed plan for the future that is usually expressed in formal quantitative
terms
cash budget - correct answer ✔a detailed plan showing how cash resources will be acquired and used
over a specific time period
continuous budget (perpetual budget) - correct answer ✔a 12-month budget that rolls forward one
month as the current month is completed
Control - correct answer ✔the process of gathering feedback to ensure that a plan is being properly
executed or modified as circumstances change
Direct Labor Budget - correct answer ✔a detailed plan that shows the direct labor-hours required to
fulfill the production budget and to provide for adequate inventories
ending finished goods inventory budget - correct answer ✔a budget showing the dollar amount of
unsold finished goods inventory that will appear on the ending balance sheet
Manufacturing Overhead Budget - correct answer ✔A detailed plan showing the production costs,
other than direct materials and direct labor, that will be incurred over a specified time period.
Master Budget - correct answer ✔A number of separate but interdependent budgets that formally lay
out the company's sales, production, and financial goals and that culminates in a cash budget, budgeted
income statement, and budgeted balance sheet.
, merchandise purchases budget - correct answer ✔a detailed plan used by a merchandising company
that shows the amount of goods that must be purchased from suppliers during the period
participated / self-imposed budget - correct answer ✔A method of preparing budgets in which
managers prepare their own budgets. These budgets are then reviewed by higher-level managers, and
any issues are resolved by mutual agreement.
planning - correct answer ✔the process of establishing goals and specifying how to achieve them
production budget - correct answer ✔a detailed plan showing the number of units that must be
produced during a period in order to satisfy both sales and inventory needs
Responsibility Accounting - correct answer ✔A system of accountability in which managers are held
responsible for those items of revenue and cost—and only those items—over which they can exert
significant control. The managers are held responsible for differences between budgeted and actual
results.
Sales Budget - correct answer ✔a detailed schedule showing expected sales expressed in both dollars
and units
selling and administrative expense budget - correct answer ✔A detailed schedule of planned expenses
that will be incurred in areas other than manufacturing during a budget period.
flexible budget - correct answer ✔A report showing estimates of what revenues and costs should have
been, given the actual level of activity for the period.
labor efficiency variance - correct answer ✔The difference between the actual hours taken to complete
a task and the standard hours allowed for the actual output, multiplied by the standard hourly labor
rate.
