M5

• (T/F) Planning is no longer needed when the resources of the firm are bounteous.

  False
• (T/F) In controlling, the differences between budget and actual results are assessed so that the adjustments may be done if needed.

  True
• (T/F) Budgeting helps in the control of operations of the firm.

  True
• (T/F) The profit to be generated in the execution of the plan is found in the pro-forma or budgeted income statement.

  True
• (T/F) Budgeting tends to synchronize the firm's operations because the budget serves as a guide as to what the company should achieve.

  True
• (T/F) Creation of strategies are aimed at maximizing the firm's future position, taking into consideration the various elements and factors that may pervade the firm's internal and external environment.

  True
• (T/F) The components in the budget manual are needed to facilitate the preparation of the budget.

  True
• (T/F) Corporate planning is organized by responsibility, time and information to ensure that all the other types of planning are carried out regularly to enable top management to direct and control the future of the firm.

  True
• (T/F) Top management does not have to formulate directives to guide the preparation of the budget.

  False
• (T/F) A pro-forma cash budget and pro-forma income statement are needed in the preparation of pro-forma statement of financial position or balance sheet.

  True
• (T/F) The sales projection is the basis for determine the number of units to be sold.

  True
• (T/F) A pro-forma cash budget can be created using the estimated cash receipts and cash disbursements.

  True
• (T/F) The budget has to be approved by the Board of Directors/Trustees before it can be implemented.

  True
• (T/F) A pro-forma income statement uses the schedules of sales and various expenses.

  True
• (T/F) It is the corporate planning department that consolidates the individual budgets to come up with the draft master budget.

  True
• (T/F) There is a need to create schedules of production, selling, administrative and other expenses.

  True
• (T/F) The heads and supervisors are involved in the preparation of individual to be consolidated to create a master budget.

  True
• (T/F) Budgeting can help in coordinating the activities of the firm.

  True
• (T/F) The financial manager has a role to play in the preparation of the master budget.

  True
• (T/F) The sales budget is considered the cornerstone of budgeting.

  True
• Involves quantifying the plans in terms of monetary value

  Budget/Budgeting
• Under this method of forecasting sales, each salesman estimates the sales inhis/her particular territory

  Sales Force Composite Method
• Under this method of forecasting sales, the view of a number of topexecutives are culled to arrive to a sales estimate

  Executive Opinion Method
• Under this method of forecasting sales, the combination of various methods of forecasting is used

  Multiple Approach Method
• Is a budget which may be done on a monthly or quarterly basis out of the budget for the year

  Rolling Budget
• An objective of budgeting which provides a yardstick against which the firm can measure and compare the budgeted amount and the actual results of operations

  Control
• Under this method the product life cycle is used in making sales forecast

  Sale Trend Analysis
• A more scientific means of forecasting sales

  Correlational Analysis Method
• A method of forecasting sales which is based on sales

  Industry Trend Analysis
• Is a formal, systematic managerial process that is organized by responsibility, time, and information to ensure that all the kinds of planning are carried out regularly to enable top management to direct and control the future of the company

  Corporate Planning
• Creation of strategies that are aimed at maximizing the firm's future position, taking into consideration the various elements and factors that may pervade the firm's internal and external environments.

  Strategic Planning
• Entails detailed plans involving acquisition of new property, plant and equipment, creation of new products, adoption of new systems, and acquisition of new entities

  Project Planning
• Also called capital expenditures planning

  Project Planning
• Concerned on how to efficiently and effectively utilize the firm's resources to achieve the company's short-term and long-term objectives already set up.

  Operational Planning
• (E) What are the types of Planning?

  Corporate, Strategic, Project, and Operational
• (E) 4 Components of the Budget Manual

  Objectives, Definition of Authority, Forms of Schedule, Form and Nature of Performance Report
• (E) 4 Method of Forecasting Sales

  Multiple Approach, Executive Opinion, Computing the Sales, Product Life Cycle
• (E) 3 Statements needed in creating the pro-forma

  Pro-forma Income Statement, Pro-forma Cash Budget, Prior period pro-forma of SFP
• (E) 3 Components of a Cash Budget

  Financial, Cash, Operation/Operational
• It focuses on what a company intends to do in the near future

  Financial Planning