1. Identify the true statement regarding budgets: A. The most common length of time for a budget is 18 months. B. The budget development process for the coming year usually starts several weeks before the current year-end. C. Another term for the bottom-up budget development approach is participative budgeting. D. The majority of small businesses (500 employees or less) do prepare annual budgets. 2. Master budgets: A. Contains two classes of budgets-operating and financial budgets. B. Is a set of interrelated individual budgets that constitute a plan of action for a specified time period. C. The term budget" is actually a shorthand term for a company's master budget. D. All of the above statements are true regarding master budgets. 3. Identify the item that would not appear on a cash budget: A. Income tax expense B. Depreciation expense C. Payments for material purchases D. Cash dividends 4. Identify the false statement regarding the production budget: A. A realistic estimate of ending inventory is essential in scheduling production requirements. B. Will show the number of units of a product to produce in order to meet anticipated sales. C. Is prepared before the Selling and Administrative Expense Budget. D. Is calculated by taking the Budgeted COGS + Desired Ending Finished Goods Units - Beginning Finished Goods Units. 5. A company reports the following information from its sales account and sales budget: Sales May June $852,000 47,000 Expected Sales: July August September 845,000 55,000 60,000 Cash sales are normally 30% of total sales and all credit sales are expected to be collected in the month following the date of sale. The total amount of cash expected to be received from customers in September is: A. $56,500 B. $60,000 C. $55,000 D. $58,500