1.A company wishes to reduce the amount of working capital it requires to finance its operations. Which of the following would be the least effective way of reducing working capital requirements?

Select one:

A. Refuse to sell on credit to any customer.

B. Offer a discount for early payment by debtors.

C. Increase the payment time for accounts payable.

D. Increase the efforts to collect overdue debtor's accounts.

2.Improving cash flow in relation to debtors and accounts payable respectively, requires:

Select one:

A. speeding up collections and slowing payments.

B. speeding up collections and speeding up payments.

C. slowing collections and slowing payments.

D. slowing collections and speeding up payments.

3.Which of these is not a cost of holding insufficient levels of inventory?

Select one:

A. Loss of sales.

B. Extra inventory storage costs.

C. High transportation costs on rush deliveries of inventory.

D. Lost production because of shortages of raw materials.

4.A budget system that always provides plans for a full 12 months into the future is known as a(an):

Select one:

a. advance budget

b. future budget

c. yearly budget

d. rolling budget

5.Sales in December of this year were $900,000. Projected sales for the first 3 months of next year are:

January$800,000

February$750,000

March$840,000

Sales are made 20% on Cash and 80% on credit. Customers pay their accounts one month after the sale.

Calculate total cash receipts expected for the month of February.

Select one:

a. $750,000

b. $150,000

c. $640,000

d. $790,000

6.Use the information below to answer the following question.

Flexed Budget for OctoberActual for October

Output40,000 units40,000 units

Sales$500,000$400,000

Raw materials$100,000$88,000

Labour$250,000$180,000

Overheads$325,000$375,000

The adverse (unfavourable) sales variance of $100,000 is best explained by-:

Select one:

a. an increase in the expenses incurred by the business in the period

b. the sales manager and sales team not making the target level of sales

c. it is not possible to tell from this information

d. the price the units were sold for was less than budgeted

7.If actual sales are $95,000 and budgeted sales are $86,000 and actual advertising paid is $7,100 and budgeted advertising is $8,300, the variances are respectively are: Note: F-Favourable, A - adverse (unfavourable).

Select one:

a. $9,000A; $1,200F

b. $9,000F; $1,200F

c. $9,000F; $1,200A

d. $9,000A; $1,200A

8.MircroSystems had the following estimates for the six months ending 31 December 2020.

Cash balance 1.7.20 (Overdraft)($8,150)

Cash receipts from commissions$85,000

Cash payments for expenses(82,300)

Proceeds from the sale of a motor vehicle6,500

Borrowing5,000

Depreciation on equipment(2,600)

The estimated cash balance at 31 December 2020 is:

Select one:

A. $3,950 (overdraft).

B. $3,450.

C. $2,100 (overdraft).

D. $6,050.

9.An unfavourable variance occurs when:

Select one:

a. actual sales are lower than budgeted sales.

b. actual costs are higher than budgeted costs.

c. budgeted costs are lower than actual costs.

d. all of the options are correct.

10.Calculating budget figures from scratch or zero-base helps managers to overcome the problem of:

Select one:

a. teamwork.

b. budget slack.

c. short deadlines.

d. budget cost.

11.Which of the following could be the cause of a favourable materials price variance?

Select one:

A. The price of materials in the original budget was set too high.

B. A discount on the purchase of materials.

C. Well-trained production workers.

D. Both A and B.