11 Which of the following would represent the order in which master budgets are prepared a) Sales, Purchases, Cash, Pro Forma Income Statement, Answer b) Purchases, Cash, Sales, Pro Forma Income Statement c) Purchases, Sales, Cash, Pro Forma Income Statement d) Sales, Pro Forma Income Statement, Cash, Purchases. 2) Select the CORRECT statement regarding the Selling and Administrative (S&A) expense budget? (1 pt) a) The S&A budget is prepared before the Sales budget. Answer b) The S&A budget is prepared after the Cash budget. c) The S&A budget is prepared before the Pro Forma Income Statement d) None of the above answers are correct. 3) The budgeting process that involves adding a month to the end of the budget period at end of each month, thus maintaining a twelve-month planning horizon, is referred to as? (1 pt) a) Participative budgeting- Answer b) Continuous budgeting. c) Capital budgeting. d) Zero-based budgeting. 4) Budgeting that involves decisions such as whether to buy or lease equipment or build a new factory is referred to as? (1 pt) a) Operations budgeting. Answer b) Capital budgeting c) Technology budgeting. d) Strategic Expense budgeting. 5) A company's numerous specific budgets (Sales, Inventory Purchases, etc) together are referred to as the? (1 pt) a) Strategic plan Answer b) Grand plan. c) Capital budget. d) Master budget. 6) Planning concerned with long-range decisions such as defining the scope of the business is referred to 37 a) Strategic planning. Answer b) Operations planning. c) Intensive planning. d) None of the above answers are correct. 7) Prescott Company wants an ending inventory balance each month equal to 30% of that month's projected Cost of Goods Sold. The balance in ending inventory at the end of January was $24,000 and projected Cost of Goods Sold for February is $90,000. Based on this information, inventory purchases for February should be? Answer: (5 pts) Work Area (optional) Inventory Purchases for February 8) Indicate whether each of the following statements is True(T) or False(F). (1 pt each) The three major categories of the master budget are the operating budgets, the capital budgets, and the financial statement budgets. The master budget usually starts with a budgeted income statement. The first budget prepared in a master budget is the sales budget. The purchasing manager should provide the projections for the sales budget (forecast). Participative budgeting means that lower level employees are primarily responsible for preparing the budget. A master budget usually provides information about plans and expectations for the upcoming 1 year period. The nature of planning changes with the length of time period being considered. Generally, the shorter the time period, the more specific the plans. Four purposes or reasons for budgeting involve planning, coordination, performance measurement and corrective action 9) Jasper Inc. budgeted the following transactions for have a $45,000 ending cash balance. ed the following transactions for June. The beginning cash balance was $70,000. The company desires to Sales (80% of this amount is expected to be collected in cash during June) Cash Operating Expenses Cash Purchases of Investments Cash Payment of Debt Depreciation on Operating Assets $200,000 120,000 60,000 10,000 12,000 Must have both of the answers below correct (dollar amount AND surplus or shortage answer) to receive any points: What is the amount of the cash surplus or shortage? (6 pts) Surplus OR (Circle one) Shortage Work Area (optional): 2 Page