Question : 21.Select the incorrect statement regarding the human factor in the : 1257176

 

 

21.Select the incorrect statement regarding the human factor in the budgeting process.   

A. Budgets force employees to follow the organization’s plan.

 

B. The evaluation feature of budget systems is frightening for many people.

 

C. There is a tendency for people to be uncomfortable with budgets.

 

D. Proper handling of human relations is essential to the establishment of an effective budget system.

 

 

22.The budgeting technique that provides for employee input into the planning process is known as:   

A. continuous budgeting.

 

B. perpetual budgeting.

 

C. participative budgeting.

 

D. zero-based budgeting.

 

 

23.Which of the following is a benefit of participative budgeting?   

A. Employees tend to be more motivated to achieve the budget.

 

B. A twelve-month planning horizon is maintained at all times.

 

C. Budget planning is highly centralized.

 

D. Communication is clearer because it flows in only one direction – upward.

 

 

24.What is the role of top management in a participative budgeting system?   

A. Top management has no role – the budget is entirely developed by the lower-level employees.

 

B. Top management must always tighten employee-set budget standards to eliminate employees’ attempts to build slack into the standards.

 

C. Top management must ensure that employee-generated objectives are consistent with those of the company.

 

D. All of these answers are correct.

 

 

25.Which of the following items is not needed to prepare a sales budget by product line?   

A. Expected purchase price of each product.

 

B. Expected unit sales of each product.

 

C. Expected selling price of each product.

 

D. All of these answers are correct.

 

 

26.Which of the following items would be least useful in preparing a schedule of cash receipts?   

A. Expected revenue from cash sales.

 

B. Number of units expected to be purchased.

 

C. Service charges for credit card sales.

 

D. Past accounts receivable collection experience.

 

 

27.Markham Company has completed its sales budget for the first quarter of 2014. Projected credit sales for the first four months of the year are shown below:  The company’s past records show collection of credit sales as follows: 40% in the month of sale and the balance in the following month. The total cash collection from receivables in March is expected to be:   

A. $18,000.

 

B. $45,000.

 

C. $41,400.

 

D. $39,600.

 

 

28.Compton Company expects the following total sales:  The company expects 60% of its sales to be credit sales and 40% for cash. Credit sales are collected as follows: 30% in the month of sale, 68% in the month following the sale with the remainder being uncollectible and written off. The budgeted accounts receivable balance on May 31 is:   

A. $12,240.

 

B. $12,600.

 

C. $20,400.

 

D. $21,000.

 

 

29.Benton Company’s sales budget shows the following expected total sales:  The company expects 80% of its sales to be on account (credit sales). Credit sales are collected as follows: 25% in the month of sale, 72% in the month following the sale with the remainder being uncollectible and written off. The total cash inflows from sales in April would be:   

A. $16,000.

 

B. $28,160.

 

C. $24,640.

 

D. $36,160.

 

 

30.Oakton Furniture provided the following information relevant to its sales for December 2013 and the first quarter of 2014:  Based on the company’s collection history, 2% of credit sales are uncollectible, 40% are collected in month of sale and the remainder collected in the following month. Cash collections in January from December 2013 credit sales would be:   

A. $69,600.

 

B. $81,200.

 

C. $72,000.

 

D. $84,000.