Budgeting Quiz

6 multiple-choice questions with answers and explanations · 1 easy, 4 medium, 1 hard

Cash budgets, production budgets, and flexible versus static budgets.

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  1. 1What Is a Budget in Accounting?A budget is:easy
  2. 2Flexible Budget vs Static BudgetA flexible budget differs from a static (fixed) budget because:medium
  3. 3Cash Budget: Calculating the Closing Cash BalanceA cash budget shows an opening balance of $8,000, receipts of $45,000 and payments of $49,000. Depreciation for the month is $3,000. What is the budgeted closing cash balance?medium
  4. 4Cash Budget: Collections from Credit SalesCredit sales are $40,000 in January and $50,000 in February. Customers pay 60% in the month of sale and 40% in the following month. What are budgeted cash receipts in February?medium
  5. 5Production Budget: Units to Be ProducedBudgeted sales are 10,000 units. Opening finished goods inventory is 1,000 units and the desired closing inventory is 1,500 units. How many units must be produced?medium
  6. 6Flexible Budget: Budgeted Cost at the Actual Level of ActivityA budget for 8,000 units shows variable costs of $64,000 and fixed costs of $30,000. Actual output is 9,000 units. What is the flexed budget for total costs?hard

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