1. Budgeted financial statements prepared from information in the master budget refer to

a. operating budget statements

b. participative budget statements

c. pro forma statements

d. budget committee statements

e. none of the above

2. The budgeting process normally begins with the preparation of

a. operating budgets

b. capital budgets

c. financial statement budgets

d. strategic budgets

e. none of the above

3. ___________________ involves deciding which market niche should be profitable.

a. operating budgeting

b. strategic planning

c. capital budgeting

d. sales forecasting

e. none of the above

4. The composition of the numerous separate but interdependent departmental budgets that cover a wide range of operating and financial factors such as sales, production, manufacturing expenses, and administrative expenses is known as

a. operating budget

b. masterbudget

c. capital budget

d. pro forma statements

e. none of the above

5. If

a. dividend

short term financing is used by a new venture the funds are repaid from

b. fixed assets

c. sales and profits

d. cash budget

e. capital

6. By far the most frequently used source of short-term funds by the entrepreneur when collateral is available is

a. venture capital

b. commercialbank

c. personal funds

d. development capital

e. none of the above

7. The three major budget categories in the master budget consist of operating budgets, capital budgets and

a. strategic plans

b. tactical budgets

c. cash budgets

d. financial statement budgets

e. none of the above

8. The master budget normally covers a

a. five year time span

b. three year time span

c. one-year time span

d. three month time span

e. none of the above

9. Which of the following involves making decisions such as whether to buy or lease equipment

a. strategic planning

b. capital budgeting

c. operating budgeting

d. tactical budgeting

e. none of the above

10. Perpetual budgeting utilises

a. a 3-month reporting period

b. a 6-month reporting period

c. a 12-month reporting period

d. a 3-year reporting period

e. none of the above

11. Which of the following is intended for higher risks such as start up situations

a. development capital

b. replacement capital

c. owners capital

d. venturecapital

e. none of the above

12. The first step in the preparation of the operating budget is

a. cash requirements

b. inventory forecast

c. sales forecast

d. purchases forecast

e. none of the above

13. Before developing the pro forma income statement, the entrepreneur should prepare the

a. strategic plan and operating budgets

b. strategic plan and capital budgets

c. capital and operating budgets

d. tactical and strategic budgets

e. none of the above

14. _______________ budgets are intended to provide a basis for evaluating expenditures that will impact the business for more than one year.

a. operating budgets

b. capital budgets

c. strategic budgets

d. frontline budgets

e. none of the above

15. Asset-based financing refers to

a. debt financing

b. equity financing

c. internal funds

d. external funds

e. none of the above

16. When interest rates are low, ________________ financing allows the entrepreneur to retain a larger ownership portion in the venture and have a greater return on equity.

a. internal

b. external

c. equity

d. debt

e. none of the above

17. An

a. account receivable

b. account payable

c. accumulated account

d. note

e. none of the above

obligation arising from the purchase of goods or services on credit is referred to as:

18. Money due from an individual or another business as payment for the performance of services or the sale of goods on credit is known as:

a. account receivable

b. account payable

c. accumulated account

d. note

e. none of the above

19. _________________ summarises the projected assets, liabilities, and equity of the new venture.

a. pro forma income statement

b. pro forma cash flow

c. pro forma balance sheet

d. pro forma accounting statement

e. none of the above

20. The component of equity in a business (company) representing accumulated profits in excess of losses and payments to owners is referred to as:

a. dividend

b. preferred stock

c. common stock

d. retained earnings