ACCT Review exam Chapter 10
b. the comparison of actual results with planned objectives.
A major element in budgetary control is
a. the preparation of long-term plans.
b. the comparison of actual results with planned objectives.
c. the valuation of inventories.
d. approval of the budget by the stockholders.
d. as frequently as needed.
Budget reports should be prepared
a. daily.
b. monthly.
c. weekly.
d. as frequently as needed.
d. all of these.
On the basis of the budget reports,
a. management analyzes differences between actual and planned results.
b. management may take corrective action.
c. management may modify the future plans.
d. all of these.
d. control overhead costs.
The purpose of the departmental overhead cost report is to
a. control indirect labor costs.
b. control selling expenses.
c. determine the efficient use of materials.
d. control overhead costs.
c. determine whether sales goals are being met.
The purpose of the sales budget report is to
a. control selling expenses.
b. determine whether income objectives are being met.
c. determine whether sales goals are being met.
d. control sales commissions.
, d. appears on periodic budget reports.
The comparison of differences between actual and planned results
a. is done by the external auditors.
b. appears on the company's external financial statements.
c. is usually done orally in departmental meetings.
d. appears on periodic budget reports.
c. shows planned results at the original budgeted activity level.
A static budget
a. should not be prepared in a company.
b. is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs.
c. shows planned results at the original budgeted activity level.
d. is changed only if the actual level of activity is different than originally budgeted.
c. the materiality of the difference.
Top management's reaction to a difference between budgeted and actual sales often depends on
a. whether the difference is favorable or unfavorable.
b. whether management anticipated the difference.
c. the materiality of the difference.
d. the personality of the top managers.
d. fixed.
If costs are not responsive to changes in activity level, then these costs can be best described as
a. mixed.
b. flexible.
c. variable.
d. fixed.
a. The year-to-date results will show a favorable difference.
Assume that actual sales results exceed the planned results for the second quarter. This favorable difference is
greater than the unfavorable difference reported for the first quarter sales. Which of the following statements about
the sales budget report on June 30 is true?
a. The year-to-date results will show a favorable difference.
b. The year-to-date results will show an unfavorable difference.
c. The difference for the first quarter can be ignored.
d. The sales report is not useful if it shows a favorable and unfavorable difference for the two quarters.
b. the comparison of actual results with planned objectives.
A major element in budgetary control is
a. the preparation of long-term plans.
b. the comparison of actual results with planned objectives.
c. the valuation of inventories.
d. approval of the budget by the stockholders.
d. as frequently as needed.
Budget reports should be prepared
a. daily.
b. monthly.
c. weekly.
d. as frequently as needed.
d. all of these.
On the basis of the budget reports,
a. management analyzes differences between actual and planned results.
b. management may take corrective action.
c. management may modify the future plans.
d. all of these.
d. control overhead costs.
The purpose of the departmental overhead cost report is to
a. control indirect labor costs.
b. control selling expenses.
c. determine the efficient use of materials.
d. control overhead costs.
c. determine whether sales goals are being met.
The purpose of the sales budget report is to
a. control selling expenses.
b. determine whether income objectives are being met.
c. determine whether sales goals are being met.
d. control sales commissions.
, d. appears on periodic budget reports.
The comparison of differences between actual and planned results
a. is done by the external auditors.
b. appears on the company's external financial statements.
c. is usually done orally in departmental meetings.
d. appears on periodic budget reports.
c. shows planned results at the original budgeted activity level.
A static budget
a. should not be prepared in a company.
b. is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs.
c. shows planned results at the original budgeted activity level.
d. is changed only if the actual level of activity is different than originally budgeted.
c. the materiality of the difference.
Top management's reaction to a difference between budgeted and actual sales often depends on
a. whether the difference is favorable or unfavorable.
b. whether management anticipated the difference.
c. the materiality of the difference.
d. the personality of the top managers.
d. fixed.
If costs are not responsive to changes in activity level, then these costs can be best described as
a. mixed.
b. flexible.
c. variable.
d. fixed.
a. The year-to-date results will show a favorable difference.
Assume that actual sales results exceed the planned results for the second quarter. This favorable difference is
greater than the unfavorable difference reported for the first quarter sales. Which of the following statements about
the sales budget report on June 30 is true?
a. The year-to-date results will show a favorable difference.
b. The year-to-date results will show an unfavorable difference.
c. The difference for the first quarter can be ignored.
d. The sales report is not useful if it shows a favorable and unfavorable difference for the two quarters.
