13. The cost of goods manufactured budget is an operating budget.

a. True

b. False

14. A sales forecast for a retail organization is based on purchases and cost of goods sold budgets.

a. True

b. False

15. It is necessary to know the budgeted number of unit sales to prepare production budget.

a. True

b. False

16. Each period's ending cash balance becomes the beginning cash balance for the next period.

a. True

b. False

17. Receipt of stock dividends, depreciation, and amortization expense will not be recorded in the cash budget prepared by an organization.

a. True

b. False

18. Once cash receipts and cash payments have been established, the cash increase or decrease is added to the period's beginning balance to arrive at a projected cash balance at period end.

a. True

b. False

19. A continuous budget is a 12-month forward-rolling budget that summarizes budgets for the next 12 months.

a. True

b. False

20. Zero-based budgeting requires the preparation of budget from scratch.

a. True

b. False

21. The budget committee oversees each stage in the preparation of a master budget.

a. True

b. False

22. Only the lowest levels of management can be evaluated using budgets.

a. True

b. False

23. Budgets identify potential constraints before they become problems.

a. True

b. False

24. Responsibility accounting authorizes managers to take control of and be held accountable for the revenues and expenses in their budgets.

a. True

b. False

25. Static budgets are prepared on quarterly basis and require frequent change during the annual budget period.

a. True

b. False