Financial Management

• The basic idea underlying responsibility accounting is that a manager should be held responsible for those items - and those only item - that the manager can actually control to a significant extent

  True
• The budgeted income statement is typically prepared before the balance sheet


  True
• Control involves developing goals and preparing various budgets to achieve these goals.

  False
• The production budget is typically prepared prior to the sales budget

  False
• Planning and control are essentially the same thing

  False
• Cash collections in a schedule of cash collections typically consist of collections on sales made to customers in prior periods plus collections on sales made in the current budget period

  True
• The master budget consists of a number of seperate but interdependent budgets

  True
• The budgeted income statement is typically prepared before the budgeted balance sheet

  True
• The cash budget is the starting point in preparing the master budget

  False
• A continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed

  True
• The production budget is typically prepared before the direct materials budget

  True
• The selling and admin. budget is typically prepared before the cash budget

  True
• The number of units to be produced in a period can be determined by adding the expected sales to the desired ending inventory and then deducting the beginning inventory


  True
• The direct labor budget begins with the required production in units from the production budget

  True
• The selling and admin. expense budget lists all costs of production other than direct materials and direct labor

  False
• In the manufacturing overhead budget, the non-cash charges (such as depreciation) are deducted from the total budgeted manufacturing overhead to determine the expected cash disbursements for manufacturing overhead


  True
• One of the weaknesses of budgets is that they are of little value in uncovering potential bottlenecks

  False
• A benefit from budgeting is that it forces manager to think about and plan for the future

  True
• The production budget is typically prepared before the direct materials budget

  False
• In a production budget, if the number of units in the finished goods inventory at the end of the period is less than the number of units in the finished goods inventory at the beginning of the period, then that expected number of units sold is less than the number of units to be produced during the period

  False
• The number of units to be produced in a period can be determined by adding the expected sales to the desired ending inventory and then deducting the beginning inventory


  True
• One disadvantage of budgeting is that budgeting makes it more difficult to coordinate the activities of the entire organization


  False
• The direct labor budget shows the direct labor hours required to satisfy the production budget

  True