MGT 6655 COMPREHENSIVE STUDY GUIDE
2026 COMPLETE QUESTIONS ANSWERS
VERIFIED
● Fargo Mfg., a small business, is developing a budget for next year.
Which of the following steps should Fargo perform first? Answer:
Forecast Fargo's sales volume.
● Which of the following types of budgets is the last budget to be
produced during the budgeting process? Answer: Cash
● In an organization that plans by using comprehensive budgeting, the
master budget is Answer: A compilation of all the separate operational
and financial budget schedules of the organization.
● While an operating budget is a key element in planning and control, it
is not likely to Answer: Set out long-range, strategic concepts.
● After the goals of the company have been established and
communicated, the next step in the planning process is development of
the Answer: Sales budget.
,● Pro forma financial statements are part of the budgeting process.
Normally, the last pro forma statement prepared is the Answer:
Statement of cash flows.
● The master budget Answer: Contains the operating budget.
● The preparation of a comprehensive master budget culminates with the
preparation of the Answer: Cash budget.
● Wilson Company uses a comprehensive planning and budgeting
system. The proper order for Wilson to prepare certain budget schedules
would be Answer: Cost of goods sold, income statement, balance sheet,
and statement of cash flows.
● Which one of the combinations listed correctly depicts the
chronological order of preparation for the following budgets?
Cost of goods sold budget
Production budget
Purchases budget
Administrative budget Answer: II, III, I, IV.
● Which one of the following best describes the order in which budgets
should be prepared when developing the annual master operating
budget? Answer: Revenue budget, production budget, direct material
budget.
, ● The foundation of a profit plan is the Answer: Sales forecast.
● The operating budget process usually begins with the Answer: Sales
budget.
● Which one of the following schedules would be the last item to be
prepared in the normal budget preparation process? Answer: Cash
budget.
● The master budget process usually begins with the Answer: Sales
budget.
● The production budget process usually begins with the Answer: Sales
budget.
● Individual budget schedules are prepared to develop an annual
comprehensive or master budget. The budget schedule that would
provide the necessary input data for the direct labor budget would be the
Answer: Production budget.
● All of the following are considered operating budgets except the
Answer: Capital budget.
2026 COMPLETE QUESTIONS ANSWERS
VERIFIED
● Fargo Mfg., a small business, is developing a budget for next year.
Which of the following steps should Fargo perform first? Answer:
Forecast Fargo's sales volume.
● Which of the following types of budgets is the last budget to be
produced during the budgeting process? Answer: Cash
● In an organization that plans by using comprehensive budgeting, the
master budget is Answer: A compilation of all the separate operational
and financial budget schedules of the organization.
● While an operating budget is a key element in planning and control, it
is not likely to Answer: Set out long-range, strategic concepts.
● After the goals of the company have been established and
communicated, the next step in the planning process is development of
the Answer: Sales budget.
,● Pro forma financial statements are part of the budgeting process.
Normally, the last pro forma statement prepared is the Answer:
Statement of cash flows.
● The master budget Answer: Contains the operating budget.
● The preparation of a comprehensive master budget culminates with the
preparation of the Answer: Cash budget.
● Wilson Company uses a comprehensive planning and budgeting
system. The proper order for Wilson to prepare certain budget schedules
would be Answer: Cost of goods sold, income statement, balance sheet,
and statement of cash flows.
● Which one of the combinations listed correctly depicts the
chronological order of preparation for the following budgets?
Cost of goods sold budget
Production budget
Purchases budget
Administrative budget Answer: II, III, I, IV.
● Which one of the following best describes the order in which budgets
should be prepared when developing the annual master operating
budget? Answer: Revenue budget, production budget, direct material
budget.
, ● The foundation of a profit plan is the Answer: Sales forecast.
● The operating budget process usually begins with the Answer: Sales
budget.
● Which one of the following schedules would be the last item to be
prepared in the normal budget preparation process? Answer: Cash
budget.
● The master budget process usually begins with the Answer: Sales
budget.
● The production budget process usually begins with the Answer: Sales
budget.
● Individual budget schedules are prepared to develop an annual
comprehensive or master budget. The budget schedule that would
provide the necessary input data for the direct labor budget would be the
Answer: Production budget.
● All of the following are considered operating budgets except the
Answer: Capital budget.
