Chapter 7

Question 1

Activity-based budgeting

Answer 1

A budget system based on expected activities

Question 2

Budget

Answer 2

A formal statement of a company’s future plans

Question 3

Budgeted balance sheet

Answer 3

Shows predicted amounts for the company’s assets, liabilities, and equity as of the end of the budget period

Question 4

Budgeted income statement

Answer 4

A managerial accounting report showing predicted amounts of sales and expenses for the budget period

Question 5

Budgeting

Answer 5

The process of planning future business actions and expressing them as formal plans

Question 6

Capital expenditures budget

Answer 6

Lists dollar amounts to be both received from plant asset disposals and spent to purchase additional plant assets to carry out the budgeted business activities

Question 7

Cash Budget

Answer 7

Shows expected cash inflows and outflows during the budget period

Question 8

Continuous budgeting

Answer 8

As the budgeting period comes to milestones the budget is constantly readjusted based on the new numbers available

Question 9

General and administrative expense budget

Answer 9

Plans the predicted operating expenses not included in the selling expenses budget

Question 10

Manufacturing budget

Answer 10

Shows the budgeted costs for direct materials, direct labor, and overhead

Question 11

Master budget

Answer 11

A formal, comprehensive plan for a company’s future. It contains several individual budgets that are linked with each other to form a coordinated plan.

Question 12

Merchandise purchases budget

Answer 12

Inventory to be purchased = Budgeted ending inventory + Budgeted cost of sales for the period - Budgeted beginning inventory

Question 13

Production budget

Answer 13

Shows the number of units to be produced each month (similar to the purchases budget, but you’re making them not buying them)

Question 14

Rolling budgets

Answer 14

Budgets are revised for each budgeted period (which is called continuous budgeting)

Question 15

Safety stock

Answer 15

A quantity of inventory that provides protection against lost sales caused by unfulfilled demands from customers or delays in shipments from suppliers

Question 16

Sales budget

Answer 16

Shows the planned sales units and the expected dollars from these sales

Question 17

Selling expense budget

Answer 17

A plan listing the types and amounts of selling expenses expected during the budget period

Question 18

Selling expense budget

Answer 18

A plan listing the types and amounts of selling expenses expected during the budget period

Question 19

Jeopardy Style

A budget system based on expected activities

Answer 19

Activity-based budgeting

Question 20

Jeopardy Style

A formal statement of a company’s future plans

Answer 20

Budget

Question 21

Jeopardy Style

Shows predicted amounts for the company’s assets, liabilities, and equity as of the end of the budget period

Answer 21

Budgeted balance sheet

Question 22

Jeopardy Style

A managerial accounting report showing predicted amounts of sales and expenses for the budget period

Answer 22

Budgeted income statement

Question 23

Jeopardy Style

The process of planning future business actions and expressing them as formal plans

Answer 23

Budgeting

Question 24

Jeopardy Style

Lists dollar amounts to be both received from plant asset disposals and spent to purchase additional plant assets to carry out the budgeted business activities

Answer 24

Capital expenditures budget

Question 25

# Jeopardy Style Shows expected cash inflows and outflows during the budget period

Answer 25

Cash Budget

Question 26

# Jeopardy Style As the budgeting period comes to milestones the budget is constantly readjusted based on the new numbers available

Answer 26

Continuous budgeting

Question 27

# Jeopardy Style Plans the predicted operating expenses not included in the selling expenses budget

Answer 27

General and administrative expense budget

Question 28

# Jeopardy Style Shows the budgeted costs for direct materials, direct labor, and overhead

Answer 28

Manufacturing budget

Question 29

# Jeopardy Style A formal, comprehensive plan for a company's future. It contains several individual budgets that are linked with each other to form a coordinated plan.

Answer 29

Master budget

Question 30

# Jeopardy Style Inventory to be purchased = Budgeted ending inventory + Budgeted cost of sales for the period - Budgeted beginning inventory

Answer 30

Merchandise purchases budget

Question 31

# Jeopardy Style Shows the number of units to be produced each month (similar to the purchases budget, but you're making them not buying them)

Answer 31

Production budget

Question 32

# Jeopardy Style Budgets are revised for each budgeted period (which is called continuous budgeting)

Answer 32

Rolling budgets

Question 33

# Jeopardy Style A quantity of inventory that provides protection against lost sales caused by unfulfilled demands from customers or delays in shipments from suppliers

Answer 33

Safety stock

Question 34

# Jeopardy Style Shows the planned sales units and the expected dollars from these sales

Answer 34

Sales budget

Question 35

# Jeopardy Style A plan listing the types and amounts of selling expenses expected during the budget period

Answer 35

Selling expense budget

Question 36

# Jeopardy Style A plan listing the types and amounts of selling expenses expected during the budget period

Answer 36

Selling expense budget