Chapter 22

Question 1

Formal statement of future plans, usually expressed in monetary terms.

Answer 1

Budget

Question 2

Plan that lists dollar amounts to be both received from disposal of plant assets and spent to purchase plant assets.

Answer 2

Capital expenditures budget

Question 3

Plan that shows expected cash inflows and outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans.

Answer 3

Cash budget

Question 4

Practice of preparing budgets for a selected number of future periods and revising those budgets as each period is completed.

Answer 4

Continuous budgeting

Question 5

Comprehensive business plan that includes specific plans for expected sales, product units to be produced, merchandise (or materials) to be purchased, expenses to be incurred, plant assets to be purchased, and amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet.

Answer 5

Master budget

Question 6

New set of budgets a firm adds for the next period (with revisions) to replace the ones that have lapsed.

Answer 6

Rolling budget