Multiple Choice Questions:

1) When a company is preparing a budgeted statement of cash flows, the payments to suppliers for purchases of inventory can be obtained from:

A) The cash budget.

B) The sales budget.

C) Budgeted cash collections.

D) The budgeted balance sheet.

2) When a company is preparing a budgeted statement of cash flows, the payments for selling and administrative expenses can be obtained from:

A) Budgeted payments for purchases.

B) The sales budget.

C) The cash budget.

D) The budgeted balance sheet.

3) Which of the following best describes the term sensitivity analysis?

A) It is a testing technique to determine how results would differ if key assumptions are changed.

B) It is an analysis of the emotional sensitivity of a company's employees.

C) It is an evaluation of the accuracy of the assumptions.

D) It evaluates a company's financial condition by doing financial statement analysis.

4) At a company with different business units, individual managers make decisions by changing various assumptions of their budget in order to determine how the modifications would affect the operational and financial results. This is an example of:

A) Financial statement analysis.

B) Responsibility accounting.

C) Sensitivity analysis.

D) Zero-based budgeting.

5) Which of the following is useful to combine the data of different segments using different software, for the purpose of creating companywide budgets?

A) Accounting development manual

B) Budgeting software

C) Financial analysis software

D) Budget creation manual