Accounting Multiple Choices

1. (TCO 5) Control can be defined as (Points : 3)

        the process of setting standards, receiving feedback on actual performance, and taking

corrective action whenever actual performance deviates significantly from plan.

        a quantification of plans, stated in either physical or financial terms or both.

        identification of corporate objectives.

        a comprehensive financial plan.

2. (TCO 5) The budgets that are comprehensive financial plans made up of various individual departmental and activity budgets are the (Points : 3)

        operating budgets.

        master budgets.

        financial budgets.

        continuous budgets.

3. (TCO 5) The body that has the responsibility to review the budget, provide policy guidelines and budgetary goals, resolve differences that may arise as the budget is prepared, approve the final budget, and monitor the actual performance of the organization as the year unfolds is called the (Points : 3)

        budget director.

        budget committee.

        controller.

        president.

4. (TCO 5) Which is NOT a component of the cash budget? (Points : 3)

        Sales forecast

        Cash disbursements

        Financing

        Cash excess or deficiency

5. (TCO 5) A budget that is developed around the actual level of activity is (Points : 3)

        a static budget.

        a continuous budget.

        a flexible budget.

        None of the above

6. (TCO 5) A budget that is developed around one particular level of activity is (Points : 3)

        a static budget.        a continuous budget.

        an incremental budget.

        None of the above

7. (TCO 5) Volume variances examine differences between (Points : 3)

        the static budget and actual costs.

        the flexible budget and the static budget.

        the static budget and the rolling budget.

        None of the above

8. (TCO 5) Goal congruence means (Points : 3)

        there is alignment of organizational and managerial goals.

        the organization is aligned to the needs of the environment.

        the organization is aligned to shareholder goals.

        there is no divergence between organizational and stockholder goals.

9. (TCO 5) Participative budgeting has which potential problem? (Points : 3)

        Building slack into a budget

        Encouraging individual behavior that is in basic conflict with the goals of the organization

        Using budgets as a part of performance evaluations, which could lead to unethical behavior

        Managers taking action that will improve performance in the short run but has long-term consequences

10. (TCO 5) Bored Manufacturing has projected the following.

Units to be produced 2,000

Direct materials 4 pounds at $5 $20

Direct labor 1 hour at $8 $8

Variable overhead 75% of direct labor

Fixed overhead 50% of direct labor

 

Which is the total amount of overhead included in the overhead budget? (Points : 3)

        $12,000

        $8,000

        $30,000

        $20,000