Choose the best answer. 1. The master budget represent: a. the actual financial
ID: 2601018 • Letter: C
Question
Choose the best answer.
1. The master budget represent:
a. the actual financial status of the company.
b. the company’s operating and financial plans for a future accounting periods.
c. the responsible of each accounting for the upper management.
d. the accounting cycle.
2. What are the three (3) levels of planning?
Master budget, pro forma financial statement and capital budgeting.
Sales budget, inventory purchases budget and cash budget.
Operating budget, capital budget and strategic planning.
Strategic planning, operations budget and cash receipts.
Strategic planning involves:
a. making long-terms decisions.
b. determine to buy or lease an equipment.
c. making short-terms decisions.
d. establish sales goals month by month.
4. Operations budgeting focuses;
a. making long-terms decisions.
b. determine to buy or lease an equipment.
c. making short-terms decisions.
d. establish sales goals month by month.
5. Advantages of Budgeting are:
Promotes motivation, more profitability and enhances performance evaluation.
Cost control, promote efficient work and sales increase.
Promote planning, promotes coordination, performance evaluation and corrective actions.
Corrective actions, promotes coordination, evaluation y measurement.
6. The sales budget have:
2 Sections; Sales Budget and Schedule of Cash Receipts
2 Sections; Schedule Sales and Cash Budgets
3 Sections: Sales Budget, Inventory Budget and Selling Expenses.
3 Sections: Sales Budget, Inventory Budget and Cash Receipts.
Explanation / Answer
1. Answer: Option b. the company’s operating and financial plans for future accounting periods.
Explanation: The master budget includes all the operating budgets such as sales, production, purchases, labor etc. including the proforma financial statements for the future periods.
2. Answer: Option c. Operating budget, capital budget and strategic planning.
Explanation: The three levels of planning include the long-term planning in strategic planning, short-term lower level planning in the operating budgets and the capital expenditure planning in the capital budget.
3. Answer: Option a. making long-term decisions
Explanation: Strategic planning involves planning for the entire entity for longer periods of three, five, or even more years.
4. Answer: Option c. making short-term decisions
Explanation: Operations budget is an annual or short-term budget which may range from a month or few months to an entire year.
Per Chegg guidelines, 4 parts have been answered.