1. A budget that adds a new month when the current month ends is called a: A. Ca
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Question
1. A budget that adds a new month when the current month ends is called a: A. Capital budget. B. Master budget. C. Rolling budget. D. There is no such budget. 2. Which philosophy in setting budgeted amounts assumes both the complete elimination of inefficiencies and a level of absolute efficiency? A. The behavioral approach. B. The total quality management approach C. Both philosophies. D. Neither philosophy. 3, which element of a master budget would normally be prepared first? A. A production budget. B. A cash budget. C. A budget of operating expenses D. A sales forecast. 4. The production schedule in units: A. Cannot be prepared until the budgeted income statement is completed. B. Is dependent upon the sales forecast for the period. C. Is based upon the manufacturing cost budget, that is, upon the level of funds available for manufacturing costs. D. Is the starting point in the preparation of the master budget. 5. In a cash budget, the budgeted level of cash receipts depends on all of the following except: A. The sales forecast. B. The credit terms offered to customers. C. The credit terms offered by suppliers. D. Experience in collecting receivables. A budget that can be adjusted easily to show budgeted revenues, costs, and cash flows at different levels of activity is known as: A. A flexible budget. B. A master budget. 6. C. A production budget. D. A multi-level budget.Explanation / Answer
Solution-1: Rolling budget is a budget which is continuously updated to accommodate new budget period as the most recent budgeted period completes. Hence, option (c) is correct and options (a), (b) and (d) are not correct.
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