Flash Cards for Accounting 2

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Term A budget can be a means of communicating a company's objectives to external parties. (T/F)|
| Definition False|
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Term A benefit of budgeting is that it provides objectives for evaluating performance (T/F)|
| Definition True|
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Term A budget can be used as a basis for evaluating performance (T/F)|
| Definition True|
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Term A well-developed budget can operate and enforce itself. (T/F)|
| Definition False|
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Term The budget itself and the administration of the budget are the responsibility of the accounting department. (T/F)|
| Definition False|
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Term The flow of input data for budgeting should be from the highest levels of responsibility to the lowest. (T/F)|
| Definition False|
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Term Effective budgeting requires clearly defined lines of authority and responsibility. (T/F)|
| Definition True|
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Term Budgets can have a positive or negative effect on human behavior depending on the manner in which the budget is developed and administered. (T/F)|
| Definition True|
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Term A budget can facilitate the coordination of activities among the segments of a large company. (T/F)|
| Definition True|
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Term The longer the budget period, the more reliable the estimates of future outcomes. (T/F)|
| Definition False|
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Term The budget committee has the responsibility for coordinating the preparation of the budget. (T/F)|
| Definition True|
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Term The budget is developed within the framework of a sales forecast. (T/F)|
| Definition True|
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Term Budgeting and long-range planning are two terms that describe the same process. (T/F)|
| Definition False|
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Term Long-range plans are used more as a review of progress toward long-term goals rather than an evaluation of specific results to be achieved. (T/F)|
| Definition True|
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Term The master budget reflects management's long-term plans encompassing five years or more. (T/F)|
| Definition False|
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Term The master budget consists of operating and financial budgets. (T/F)|
| Definition True|
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Term Financial budgets must be completed before the operating budgets can be prepared. (T/F)|
| Definition False|
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Term The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known. (T/F)|
| Definition False|
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Term The number of direct labor hours needed for production is obtained from the production budget. (T/F)|
| Definition True|
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Term A manufacturing overhead budget is not needed if the company develops a predetermined overhead rate to apply overhead. (T/F)|
| Definition False|
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Term The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs. (T/F)|
| Definition False|
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Term A production budget should be prepared before the sales budget. (T/F)|
| Definition False|
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Term The direct materials budget contains both quantity and cost data. (T/F)|
| Definition True|
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Term The budgeted income statement indicates the expected profitability of operations for the next year. (T/F)|
| Definition True|
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Term If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month. (T/F)|
| Definition False|
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Term The budgeted balance sheet is prepared entirely from the budgets for the current year. (T/F)|
| Definition False|
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Term The starting point when budgeting for a not-for-profit organization is generally to budget expenditures first. (T/F)|
| Definition True|
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Term A merchandiser has a merchandise purchases budget rather than a production budget. (T/F)|
| Definition True|
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Term A critical factor in budgeting...
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