ACCT 212 All Powerpoints Exam Questions with Correct Answers Latest Update 2025/2026
What is budgeting? - Answers The process of planning future business actions and expressing
them as formal plans.
What is a budget? - Answers A formal statement of a company's plans in dollars.
What is the budgetary control process? - Answers Management's use of budgets to ensure that
planned objectives are met.
List one benefit of budgeting. - Answers It provides a benchmark for evaluating performance.
How does budgeting help in coordination? - Answers It coordinates the activities of all
employees and departments towards the company's overall goals.
What role does budgeting play in communication? - Answers It communicates management's
specific action plans to all employees.
How can budgeting motivate employees? - Answers Budgeting performance levels provide
goals for employees to attain or exceed.
What can be a potential negative outcome of budgeting? - Answers It can cause pressure on
employees to meet results, potentially leading to unethical behavior.
What is a rolling budget? - Answers 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? - Answers Operating budgets, cash budgets, and budgeted
financial statements.
What does a sales budget show? - Answers Projected sales in units and dollars for a specific
period.
What is the purpose of a production budget? - Answers 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? - Answers The budgeted costs for direct
materials needed to satisfy estimated production for the period.
What is the direct labor budget based on? - Answers The production budget.
What does the factory overhead budget show? - Answers 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? - Answers $2.50 per unit of
production.
What is the significance of budget evaluations? - Answers They offer opportunities to explain
,differences between actual and budgeted amounts.
What is the impact of employee involvement in budgeting? - Answers 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? - Answers The
production budget is based on the unit sales projected in the sales budget.
What does the cash budget outline? - Answers The expected cash inflows and outflows for a
specific period.
How does budgeting affect human behavior? - Answers It can be a motivating force or create
pressure leading to unethical behavior.
What is the purpose of budget reporting? - Answers To communicate financial performance and
variances from the budget.
What is a master budget? - Answers A comprehensive financial plan that includes all aspects of
a company's operations.
What is the role of budgeted financial statements? - Answers To project the expected financial
position and performance of the company.
What is the fixed overhead cost per month? - Answers $1,500 per month.
How many units does TSC assume it will normally produce each quarter? - Answers 3,000 units.
What is the fixed overhead cost per unit for TSC? - Answers $1.50 per unit.
What budgets are prepared using the product cost per unit? - Answers Cost of goods sold
budget and budgeted income statement.
What percentage of total sales does TSC pay in sales commissions? - Answers 10 percent.
What is the monthly salary of TSC's sales manager? - Answers $2,000.
What are the general and administrative salaries for Toronto Sticks Company? - Answers
$54,000 per year or $4,500 per month.
What does the capital expenditures budget report? - Answers Expected cash receipts and cash
payments related to the sale and purchase of plant assets.
What does the cash budget show? - Answers Budgeted cash receipts and cash payments during
the budget period.
What percentage of each month's sales are cash sales for TSC? - Answers 40 percent.
What is the accounts receivable balance at the end of each month for TSC? - Answers 60% of
, that month's budgeted sales.
What is included in the budgeted income statement? - Answers 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? - Answers To analyze revenue per employee for
a service firm.
What is the key difference in budgeting for service companies compared to manufacturing
companies? - Answers Service providers typically need fewer operating budgets than
manufacturers.
What is the general layout for the merchandise purchases budget in equation form? - Answers 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? - Answers 90% of next month's
unit sales.
What is the focus of Learning Objective P1? - Answers To prepare the operating budgets of a
master budget for a manufacturing company.
What is the focus of Learning Objective P2? - Answers To prepare a cash budget for a
manufacturing company.
What is the focus of Learning Objective P3? - Answers To prepare budgeted financial
statements.
What is the focus of Learning Objective A1? - Answers To prepare a direct labor budget for a
service firm and analyze revenue per employee.
What is the focus of Learning Objective P4? - Answers To prepare each component of a master
budget for a merchandising company.
What is a flexible budget? - Answers A budget based on more than one amount of sales or other
activity measure.
What is the purpose of a flexible budget? - Answers To provide a 'what-if' analysis and allow for
an 'apples to apples' comparison of actual performance.
How do fixed budgets differ from flexible budgets? - Answers Fixed budgets are based on one
predicted amount of sales, while flexible budgets adjust for varying levels of activity.
What is a fixed budget performance report? - Answers A report that compares actual results
with results expected under a fixed budget.
What is the formula for total budgeted costs in a flexible budget? - Answers Total Budgeted
What is budgeting? - Answers The process of planning future business actions and expressing
them as formal plans.
What is a budget? - Answers A formal statement of a company's plans in dollars.
What is the budgetary control process? - Answers Management's use of budgets to ensure that
planned objectives are met.
List one benefit of budgeting. - Answers It provides a benchmark for evaluating performance.
How does budgeting help in coordination? - Answers It coordinates the activities of all
employees and departments towards the company's overall goals.
What role does budgeting play in communication? - Answers It communicates management's
specific action plans to all employees.
How can budgeting motivate employees? - Answers Budgeting performance levels provide
goals for employees to attain or exceed.
What can be a potential negative outcome of budgeting? - Answers It can cause pressure on
employees to meet results, potentially leading to unethical behavior.
What is a rolling budget? - Answers 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? - Answers Operating budgets, cash budgets, and budgeted
financial statements.
What does a sales budget show? - Answers Projected sales in units and dollars for a specific
period.
What is the purpose of a production budget? - Answers 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? - Answers The budgeted costs for direct
materials needed to satisfy estimated production for the period.
What is the direct labor budget based on? - Answers The production budget.
What does the factory overhead budget show? - Answers 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? - Answers $2.50 per unit of
production.
What is the significance of budget evaluations? - Answers They offer opportunities to explain
,differences between actual and budgeted amounts.
What is the impact of employee involvement in budgeting? - Answers 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? - Answers The
production budget is based on the unit sales projected in the sales budget.
What does the cash budget outline? - Answers The expected cash inflows and outflows for a
specific period.
How does budgeting affect human behavior? - Answers It can be a motivating force or create
pressure leading to unethical behavior.
What is the purpose of budget reporting? - Answers To communicate financial performance and
variances from the budget.
What is a master budget? - Answers A comprehensive financial plan that includes all aspects of
a company's operations.
What is the role of budgeted financial statements? - Answers To project the expected financial
position and performance of the company.
What is the fixed overhead cost per month? - Answers $1,500 per month.
How many units does TSC assume it will normally produce each quarter? - Answers 3,000 units.
What is the fixed overhead cost per unit for TSC? - Answers $1.50 per unit.
What budgets are prepared using the product cost per unit? - Answers Cost of goods sold
budget and budgeted income statement.
What percentage of total sales does TSC pay in sales commissions? - Answers 10 percent.
What is the monthly salary of TSC's sales manager? - Answers $2,000.
What are the general and administrative salaries for Toronto Sticks Company? - Answers
$54,000 per year or $4,500 per month.
What does the capital expenditures budget report? - Answers Expected cash receipts and cash
payments related to the sale and purchase of plant assets.
What does the cash budget show? - Answers Budgeted cash receipts and cash payments during
the budget period.
What percentage of each month's sales are cash sales for TSC? - Answers 40 percent.
What is the accounts receivable balance at the end of each month for TSC? - Answers 60% of
, that month's budgeted sales.
What is included in the budgeted income statement? - Answers 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? - Answers To analyze revenue per employee for
a service firm.
What is the key difference in budgeting for service companies compared to manufacturing
companies? - Answers Service providers typically need fewer operating budgets than
manufacturers.
What is the general layout for the merchandise purchases budget in equation form? - Answers 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? - Answers 90% of next month's
unit sales.
What is the focus of Learning Objective P1? - Answers To prepare the operating budgets of a
master budget for a manufacturing company.
What is the focus of Learning Objective P2? - Answers To prepare a cash budget for a
manufacturing company.
What is the focus of Learning Objective P3? - Answers To prepare budgeted financial
statements.
What is the focus of Learning Objective A1? - Answers To prepare a direct labor budget for a
service firm and analyze revenue per employee.
What is the focus of Learning Objective P4? - Answers To prepare each component of a master
budget for a merchandising company.
What is a flexible budget? - Answers A budget based on more than one amount of sales or other
activity measure.
What is the purpose of a flexible budget? - Answers To provide a 'what-if' analysis and allow for
an 'apples to apples' comparison of actual performance.
How do fixed budgets differ from flexible budgets? - Answers Fixed budgets are based on one
predicted amount of sales, while flexible budgets adjust for varying levels of activity.
What is a fixed budget performance report? - Answers A report that compares actual results
with results expected under a fixed budget.
What is the formula for total budgeted costs in a flexible budget? - Answers Total Budgeted
