ACCT 6521 EXAM 3 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
Question:
1. The cash budget is usually prepared after the budgeted
income statement.
Answer:
FALSE
Question:
2. The manufacturing overhead budget is typically
prepared before the production budget.
Answer:
FALSE
Question:
3. Self-imposed budgets prepared by lower-level managers
should be scrutinized by higher levels of management.
Answer:
TRUE
Question:
4. The basic idea underlying responsibility accounting is that
each manager should be held responsible for the overall
profit of the company to ensure that all managers are
acting together.
Answer:
FALSE
Question:
5. Budgets are used to plan and to control operations.
Answer:
TRUE
Question:
6. The sales budget is usually prepared before the
production budget.
Answer:
TRUE
,Question:
7. A continuous or perpetual budget is a budget that almost
never needs to be revised.
Answer:
FALSE
Question:
8. The cash budget is typically prepared before the direct
materials budget.
Answer:
FALSE
Question:
9. In business, a budget is a method for putting a limit on
spending.
Answer:
FALSE
Question:
10. Planning involves gathering feedback to ensure that the
plan is being properly executed or modified as
circumstances change.
Answer:
FALSE
Question:
11. A benefit of self-imposed budgeting is that it may allow
lower-level managers to create budgetary slack.
Answer:
FALSE
Question:
12. The first budget a company prepares in a master budget
is the production budget
Answer:
FALSE
, Question:
13. One disadvantage of a self-imposed budget is that
budget estimates prepared by front-line managers are
often less accurate and reliable than estimates prepared
by top managers.
Answer:
FALSE
Question:
14. The direct materials budget is typically prepared before
the production budget.
Answer:
FALSE
Question:
15. A self-imposed budget is a budget that is prepared with
the full cooperation and participation of managers at all
levels.
Answer:
TRUE
Question:
16. The sales budget often includes a schedule of expected
cash collections.
Answer:
TRUE
Question:
17. The number of units to be produced in a period can be
determined by adding the expected sales to the
beginning inventory and then deducting the desired
ending inventory.
Answer:
FALSE
Question:
18. In a merchandising company, the required merchandise
purchases for a period are determined by subtracting the
desired ending inventory from the sum of the units to be
sold during the period and the units in beginning
inventory.
Answer:
FALSE
AND CORRECT ANSWERS
Question:
1. The cash budget is usually prepared after the budgeted
income statement.
Answer:
FALSE
Question:
2. The manufacturing overhead budget is typically
prepared before the production budget.
Answer:
FALSE
Question:
3. Self-imposed budgets prepared by lower-level managers
should be scrutinized by higher levels of management.
Answer:
TRUE
Question:
4. The basic idea underlying responsibility accounting is that
each manager should be held responsible for the overall
profit of the company to ensure that all managers are
acting together.
Answer:
FALSE
Question:
5. Budgets are used to plan and to control operations.
Answer:
TRUE
Question:
6. The sales budget is usually prepared before the
production budget.
Answer:
TRUE
,Question:
7. A continuous or perpetual budget is a budget that almost
never needs to be revised.
Answer:
FALSE
Question:
8. The cash budget is typically prepared before the direct
materials budget.
Answer:
FALSE
Question:
9. In business, a budget is a method for putting a limit on
spending.
Answer:
FALSE
Question:
10. Planning involves gathering feedback to ensure that the
plan is being properly executed or modified as
circumstances change.
Answer:
FALSE
Question:
11. A benefit of self-imposed budgeting is that it may allow
lower-level managers to create budgetary slack.
Answer:
FALSE
Question:
12. The first budget a company prepares in a master budget
is the production budget
Answer:
FALSE
, Question:
13. One disadvantage of a self-imposed budget is that
budget estimates prepared by front-line managers are
often less accurate and reliable than estimates prepared
by top managers.
Answer:
FALSE
Question:
14. The direct materials budget is typically prepared before
the production budget.
Answer:
FALSE
Question:
15. A self-imposed budget is a budget that is prepared with
the full cooperation and participation of managers at all
levels.
Answer:
TRUE
Question:
16. The sales budget often includes a schedule of expected
cash collections.
Answer:
TRUE
Question:
17. The number of units to be produced in a period can be
determined by adding the expected sales to the
beginning inventory and then deducting the desired
ending inventory.
Answer:
FALSE
Question:
18. In a merchandising company, the required merchandise
purchases for a period are determined by subtracting the
desired ending inventory from the sum of the units to be
sold during the period and the units in beginning
inventory.
Answer:
FALSE
