Multiple Choice Questions:

1) Which of the following describes the cash budget?

A) It aids in planning to ensure the company has adequate inventory and cash on hand.

B) It captures the variable and fixed expenses of the business.

C) It depicts the breakdown of sales based on terms of collection.

D) It helps in planning to ensure the business has adequate cash.

2) Which of the following describes the selling and administrative expenses budget?

A) It aids in planning to ensure the company has adequate inventory on hand.

B) It captures the variable and fixed components of selling and administrative expenses of the business.

C) It depicts the breakdown of sales based on terms of collection.

D) It helps in planning to ensure the business has adequate cash.

3) Which of the following describes the production budget?

A) It aids in planning to ensure the company has adequate inventory and cash on hand.

B) It gives the quantity of finished goods to be manufactured during a budget period.

C) It depicts the breakdown of sales on the basis of terms and conditions of collection of sales revenue.

D) It helps in planning to ensure the business has adequate cash.

4) A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. While doing so, the cash balance can be taken from:

A) The operational budget.

B) The budgeted income statement.

C) The cash budget.

D) The sales budget.

5) A company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet. The balance of Accounts Receivable can be obtained from:

A) The inventory, purchases and cost of goods sold budget.

B) Cash receipts from customers.

C) The capital expenditures budget.

D) The selling and administrative expenses budget.