This quiz works best with JavaScript enabled. Home > Accounting > Budgeting > The Master Budget > The Master Budget – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books The Master Budget Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A business may prepare for a cash deficit by: A) Reducing capital contributions. B) Reducing planned profits. C) Increasing loan payments. D) Reducing planned cash payments. Show Answer Correct Answer: D) Reducing planned cash payments. 2. The first step in planning and control is A) Strategic planning. B) Setting long-term objectives. C) Preparation of the budget. D) Performance evaluation. Show Answer Correct Answer: A) Strategic planning. 3. The following are elements attached to the budget, except ..... A) Covers all company activities. B) Expressed in monetary units. C) Made for a certain period of time to come. D) Meet the long-term goals of the organization. Show Answer Correct Answer: D) Meet the long-term goals of the organization. 4. This budget shows the units that must be produced to meet anticipated sales. A) Production. B) Master. C) Direct materials. D) Sales. Show Answer Correct Answer: A) Production. 5. A cash budget is used to determine: A) The value of the business. B) Cash closing balance. C) Profit. D) The debts of the business. Show Answer Correct Answer: B) Cash closing balance. 6. A budgeted income statement can be used by the business to predict: A) Profit. B) Expenses. C) Revenue. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. It is the process of planning andmanagement of the long-term investments ofthe company. A) Capital Budget. B) Profitability budget. C) Sales budget. D) Cash budget. Show Answer Correct Answer: A) Capital Budget. 8. Comprehensive financial plan? A) Continuous budget. B) Master budget. C) Continuous budget. D) Master budget. Show Answer Correct Answer: B) Master budget. 9. The production budget shows expected unit sales of 32, 000. Beginning finished goods units are 3, 600. Required production units are 33, 600. What are the desired ending finished goods units? A) 3, 600. B) 5, 200. C) 6, 400. D) 2, 000. Show Answer Correct Answer: B) 5, 200. 10. What is NOT one of the benefits of budgeting? A) Planning ahead. B) Knowing the future will always be correct. C) Motivating personnel. D) Creating early warning system. Show Answer Correct Answer: B) Knowing the future will always be correct. 11. Budget usage is ..... A) As work guidelines. B) Performance benchmarks. C) A and b are true. D) A and b are wrong. Show Answer Correct Answer: C) A and b are true. 12. These are the costs of personnel who are not directly involved with the transformation of the raw material into a finished product, but whose responsibilities are to support, supervise or direct. A) Direct labor. B) Indirect labor. C) Cost centre. D) None of above. Show Answer Correct Answer: B) Indirect labor. 13. Short-term goals ..... A) More than 3 years to reach. B) Take 3-12 months to reach. C) Less than 5 year to reach. D) 1-3 years to reach. Show Answer Correct Answer: B) Take 3-12 months to reach. 14. Which of the following budgets concerns the income-generating activities of the firm? A) Operating budget. B) Financial budget. C) Capital budget. D) All of the above. Show Answer Correct Answer: A) Operating budget. 15. A budget is/does NOT A) Control device. B) A means to always a profitable company. C) Promotes efficiency. D) A primary method of communication. Show Answer Correct Answer: B) A means to always a profitable company. 16. Visionary view to see what actions should be taken to realize certain goals is called A) Plan. B) Budget. C) Planning. D) Control. Show Answer Correct Answer: C) Planning. 17. The production budget shows that expected unit sales are 48, 000. The total required units are 54, 000. What are the required production units? A) Cannot be determined from the data provided. B) 6, 000. C) 9, 000. D) 12, 000. Show Answer Correct Answer: A) Cannot be determined from the data provided. 18. The budget mechanism that allows lower-level managers to participate in budgeting A) Participatory budget. B) Behavioral budget. C) Pseudo participation budget. D) Cooperation budget. Show Answer Correct Answer: A) Participatory budget. 19. Long-term goals ..... A) Take 3-12 months to reach. B) 1-3 years to reach. C) Less than 5 year to reach. D) More than 3 years to reach. Show Answer Correct Answer: D) More than 3 years to reach. 20. Jiggy Company plans to sell 33, 000 units during the month of May. The company plans to have 2, 500 units on hand at the end of the month. If 1, 200 units are on hand on May 1, how many units must be produced during May? A) 33, 000. B) 31, 800. C) 35, 500. D) 34, 300. Show Answer Correct Answer: D) 34, 300. 21. What are the elements that integrate a budget? A) Assets, liabilities, equity. B) Income, cost and expenses. C) Materials, purchases, raw material inventories. D) None of above. Show Answer Correct Answer: B) Income, cost and expenses. 22. Budget showing the forecast of future entriesand cash outflows (money in cash) of a company, toa certain period of time. A) Sales budget. B) Cash budget. C) Profiability budget. D) Capital budget. Show Answer Correct Answer: B) Cash budget. 23. What is the cash flow budget based on? A) Is based on credit and collection policies. B) Is based on the sales report. C) Is based on the expense report. D) None of above. Show Answer Correct Answer: A) Is based on credit and collection policies. 24. The two classes of budgets are: A) Variable & Fixed. B) Sales & Product. C) Direct materials & Direct labor. D) Operating & Financial. Show Answer Correct Answer: D) Operating & Financial. 25. A budget that contains estimates related to the company's activities within a certain period (period) to come, is referred to as ..... A) Revenue Budget. B) Financial Budget. C) Operating Budget. D) Forecasting Budget. Show Answer Correct Answer: C) Operating Budget. 26. Management's operating & financial plans for a specified period, including budged financial reports is expressed in: A) Sales Budget. B) Cash Budget. C) Production Budget. D) Master Budget. Show Answer Correct Answer: D) Master Budget. 27. The part of the master budget that contains information on expenses incurred for activities other than production activities is ..... A) Factory overhead budget. B) Operating cost budget. C) Raw material usage budget. D) Profit and loss budget. Show Answer Correct Answer: B) Operating cost budget. 28. The direct materials budget shows:Desired ending direct materials 48, 000 poundsTotal materials required 69, 000 poundsDirect materials purchases 63, 200 poundsThe total direct materials needed for production is A) 21, 000 pounds. B) 15, 200 pounds. C) 132, 200 pounds. D) 5, 800 pounds. Show Answer Correct Answer: A) 21, 000 pounds. 29. The first step in the budgeting process is the preparation of the A) Production budget. B) Selling and administrative expenses budget. C) Sales forecast. D) Cash budget. Show Answer Correct Answer: C) Sales forecast. 30. Which of the following items are not included in a cash budget? A) Payment received from debtors. B) Cash sales. C) Gain on sale of asset. D) Interest received from the bank. Show Answer Correct Answer: C) Gain on sale of asset. Next →Related QuizzesBudgeting QuizzesAccounting QuizzesThe Master Budget Quiz 2 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books