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Chapter 6 Master Budget and Responsibility Accounting

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Cost Accounting: A Managerial Emphasis, 16e (Horngren) Chapter 6 Master Budget and Responsibility Accounting 6.1 Objective 6.1 1) Which of the following is true of a budget? A) Budgets are used to ... express only the operational plans and not the strategic plans of a company. B) Budgets do not account for nonfinancial aspects of the upcoming period. C) Budgets are most useful when they are planned independently of the company's strategic plans. D) Budgets help managers to revise their plans and strategies. Answer: D Diff: 1 Objective: 1 AACSB: Analytical thinking 2) Which of the following is a financial budget? A) budgeted balance sheet B) cash receivables budget C) production budget D) cost of goods sold budget Answer: A Diff: 1 Objective: 1 AACSB: Analytical thinking 3) Budgets incorporate managements goals and A) are a strategic long range plan B) are both a short-range and long-range profit plan C) includes only financial aspects of an operation as those are the only items that can be quantified in a profit plan D) express management's operating and financial plan for a specified period - usually a fiscal year Answer: D Diff: 2 Objective: 1 AACSB: Analytical thinking 4) Which of the following is true of master budgets? A) They include only financial aspects of a plan and exclude nonfinancial aspects. B) Includes both financial and nonfinancial aspects of management's plans. C) They aid in quantifying the expectations of all stakeholders. D) They must be administered rigidly after they are committed to. Answer: B Diff: 2 Objective: 1 AACSB: Analytical thinking5) Operating decisions primarily deal with ________. A) the best use of scarce resources B) how to obtain funds to acquire resources C) acquiring equipment and buildings D) satisfying stockholders Answer: A Diff: 2 Objective: 1 AACSB: Analytical thinking 6) Financing decisions primarily deal with ________. A) the use of scarce resources B) how to obtain funds to acquire resources C) acquiring equipment and buildings D) preparing financial statements for stockholders Answer: B Diff: 2 Objective: 1 AACSB: Analytical thinking 7) A master budget ________. A) is the initial plan of what the company intends to accomplish in the period and evolves from both the operating and financing decisions B) is only prepared for manufacturers as they are the only type of company with material purchases and work-in-process accounts. C) improves companies' market capitalization and evolves from both the investing and financing decisions D) is another name given to the financial budget Answer: A Diff: 2 Objective: 1 AACSB: Analytical thinking [Show More]

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