361-Chapter-8-MC-Solutions

Chapter8—TheMasterBudgetMULTIPLECHOICE1.Abudgetaidsina.communication.b.motivation.c.coordination.d.alloftheabove.ANS:DPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling2.Measuringthefirm'sperformanceagainstestablishedobjectivesispartofwhichofthefollowingfunctions?a.Planningb.Controllingc.Organizingd.StaffingANS:BPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting3.Thepreparationofanorganization'sbudgeta.forcesmanagementtolookaheadandtrytoseethefutureoftheorganization.b.requiresthattheentiremanagementteamworktogethertomakeandcarryouttheyearlyplan.c.makesperformancereviewpossibleatalllevelsofmanagement.d.alloftheabove.ANS:DPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,ReportingChapter824.Whichofthefollowingisabasicelementofeffectivebudgetarycontrol?a.costbehaviorpatternsb.cost-volume-profitanalysisc.standardcostingd.alloftheaboveANS:APTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting5.Whenactualperformancevariesfromthebudgetedperformance,managerswillbemorelikelytorevisefuturebudgetsifthevarianceswerea.controllableratherthanuncontrollable.b.uncontrollableratherthancontrollable.c.favorableratherthanunfavorable.d.small.ANS:BPTS:1DIF:ModerateOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting6.Externalfactorsthatcausetheachievementofcompanygoalsarethea.annualbudget.b.industrypriceandcoststructure.c.talentspossessedbyitsmanagers.d.boardofdirectors.ANS:BPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling7.Abudgetisa.aplanningtool.b.acontroltool.c.ameansofcommunicatinggoalstothefirm'sdivisions.d.alloftheabove.ANS:DPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling8.Ineffectivebudgetsand/orcontrolsystemsarecharacterizedbytheuseofa.budgetsasaplanningtoolonlyanddisregardingthemforcontrolpurposes.b.budgetsformotivation.c.budgetsforcoordination.d.thebudgetforcommunication.ANS:APTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModelingChapter839.Strategicplanningisa.planningactivitiesforpromotingproductsforthefuture.b.planningforappropriateassignmentsofresources.c.settingstandardsfortheuseofimportantbuthard-to-findmaterials.d.statingandestablishinglong-termplans.ANS:DPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling10.Keyvariablesthatareidentifiedinstrategicplanningarea.normallycontrollableiftheyareinternal.b.seldomifevercontrollable.c.normallycontrollableiftheyoccurinadomesticmarket.d.normallyuncontrollableiftheyareinternal.ANS:APTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling11.Tacticalplanningusuallyinvolveswhichlevelofmanagement?a.middleb.topc.middleandtopd.operationalANS:CPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:DecisionModeling12.Whichofthefollowingstatementsistrue?a.Allorganizationshavethesamesetofbudgets.b.Allorganizationsarerequiredtobudget.c.Budgetsareaquantitativeexpressionofanorganization'sgoalsandobjectives.d.Budgetsshouldneverbeusedtoevaluateperformance.ANS:CPTS:1DIF:EasyOBJ:8-1NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting13.Whichofthefollowingisnotanoperatingbudget?a.salesbudgetb.productionbudgetc.purchasesbudgetd.capitalbudgetANS:DPTS:1DIF:EasyOBJ:8-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,ReportingChapter8414.Themasterbudgetisastaticbudgetbecauseita.isgearedtoonlyonelevelofproductionandsales.b.neverchangesfromoneyeartothenext.c.coversapresetperiodoftime.d.alwayscontainsthesameoperatingandfinancialbudgets.ANS:APTS:1DIF:EasyOBJ:8-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting15.Themasterbudgetisaa.staticbudget.b.flexiblebudget.c.qualitativeexpressionofapriorgoal.d.qualitativeexpressionofafuturegoal.ANS:APTS:1DIF:EasyOBJ:8-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting16.Themasterbudgetusuallyincludesa.anoperatingbudget.b.acapitalbudget.c.proformafinancialstatements.d.alloftheabove.ANS:DPTS:1DIF:EasyOBJ:8-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting17.Whichofthefollowingisusuallyperceivedasbeingthemasterbudget'sgreatestadvantagetomanagement?a.performanceanalysisb.increasedcommunicationc.increasedcoordinationd.requiredplanningANS:DPTS:1DIF:EasyOBJ:8-2NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,Reporting18.Chronologically,thefirstpartofthemasterbudgettobepreparedwouldbethea.salesbudget.b.productionbudget.c.cashbudget.d.proformafinancialstatements.ANS:APTS:1DIF:EasyOBJ:8-3NAT:AACSB:ReflectiveThinkingLOC:AICPAFunctionalCompetencies:Measurement,ReportingChapter8519.Anexampleofarecurringshort-termplanisa.aprobableproductlinechan