Which of the following statements is false?For merchandising companies with different items in stock for sale, only one purchase budgetwould be prepared.О а.O b. The interest expense in the budgeted income statement comes from the cash budget.If a company produces and sells customized goods only by order, it may not have any desiredО с.ending finished goods inventory when preparing its budgets.O d. We should prepare sales budget before we prepare the production budget.O e.None of the given answers.

Merchandising companies purchases finished goods and sells them to customers. Hence, merchandising…

Which of the following statements is false? For merchandising companies with different items in stock for sale, only one purchase budget would be prepared. a. O b. The interest expense in the budgeted income statement comes from the cash budget. O c. If a company produces and sells customized goods only by order, it may not have any desired ending finished goods inventory when preparing its budgets. d. We should prepare sales budget before we prepare the production budget. е. None of the given answers.

Which of the following statements is false? For merchandising companies with different items in stock for sale, only one purchase budget would be prepared. a. O b. The interest expense in the budgeted income statement comes from the cash budget. O c. If a company produces and sells customized goods only by order, it may not have any desired ending finished goods inventory when preparing its budgets. d. We should prepare sales budget before we prepare the production budget. е. None of the given answers.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following statements is false? (You may select more than one answer.)a. A flexible budget is used for control purposes and a static budget is used for planning purposes.b. A flexible budget is prepared at the end of the period and a static budget is prepared at the beginning of the period.c. A flexible budget is not useful for controlling variable costs.d. A static budget provides budgeted estimates for one level of activity.
Budget slack is the situation in which a. there is an intentional overstatement of expenses. b. there is an intentional overstatement of revenues. c. the company is ahead of schedule in preparing the budget. d. sales are slow during certain budget periods.
How many statements below regarding margin of safety are correct? 1. It is the amount by which sales can be reduced without incurring a loss. 2. It is the difference between budgeted sales and breakeven sales. 3. It can be expressed in terms of unit, pesos or percentage of sales. 4. Its presence indicates that the company expects profit. 5. The product of margin of safety units and unit contribution margin is the projected profit for the period. 6. The higher the margin of safety, the lower is the risk of incurring operating loss. 3 4
1. A budget is a detailed financial plan that quantifies future expectations and actions relative to acquiring and using resources. a. True b. False 2. Budgets should not be used to provide managers with “pre-approval” for the execution of spending plans. a. True b. False 3. A flexible budget is not designed to change with changes in activity level. a. True b. False 4. The production budget comes before the materials purchases budget. a.True b. False 5. The starting point for the master budget is an assessment of anticipated production next year. a. False b. True
Need clear answers and explanation for these questions.
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38 Which of the following is FALSE on different approaches of budgeting? Review Later O In value proposition budgeting, a value proposition has to be made for each line item on the income statement to justify why it should be included in the budget. Activity based budgeting may lead to budgeting slack and a manager may overshoot the size of the budget. Zero-based budgeting is time consuming and best suited for discretionary costs (non-essential operating costs) Incremental budgeting takes previous years' budget and add or subtract a certain percentage from it to make the new year's budget.
The budgeted direct costs of sales depend upon the volume of budgeted sales and production True False
Which of the following statements is NOT correct? a. The cash budget must be prepared prior to the sales budget because managers want to know the expected cash collections on sales made to customers in prior periods before projecting sales for the current period. b. The sales budget is constructed by multiplying the expected sales in units by the sales price. c. The sales budget is the starting point in preparing the master budget. d. The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
40.The accounts below appear in the December 31, 2020 trial balance of Spartans Corporation: Authorized Share Capital P 5,000,000Unissued Share Capital 2,000,000Subscribed Share Capital 1,000,000Subscription Receivable-due 2018 400,000Property Dividends Payable 800,000Share Premium 500,000Retained Earnings-unappropriated 600,000Retained Earnings-appropriated 300,000Treasury Shares-at cost 100,000 In its December 31, 2020 Statement of Financial Position, what is the amount of Spartans total Shareholders’ Equity.
The first step in preparing the sales budget is toa. prepare a sales forecast.b. review the production budget carefully.c. assess the desired ending inventory of finished goods.d. talk with past customers.e. increase sales beyond the forecast level.