A Quiz On Accounting For Pros

44 Questions | By AllAmericanOne | Updated: Mar 21, 2022 | Attempts: 267

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Accounting is the development and use of a system for recording and analyzing the transactions and financial status of a business or other organization. Every business must have a system of keeping their records of their financial flows and concerns of profit and loss. The quiz on accounting for pros will guide your understanding. Try it.

Questions and Answers

1.

The . budget is a major part of the master budget and focuses on the income statement and it's supporting schedules.
- A.
  
  Operating
- B.
  
  Cash
- C.
  
  Capital Expenditures
- D.
  
  Financial
2.

Whicih of the following budgets is part of the financial budgets?
- A.
  
  Production Budget
- B.
  
  Budgeted Balance Sheet
- C.
  
  Budgeted Income Statement
- D.
  
  Sales Budget
3.

Stiller Company expects cash sales for July of $15000, and a 20% monthly increase during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?
- A.
  
  18,000 and 12,500
- B.
  
  21,600 and 15,376
- C.
  
  23,438 and 14,400
- D.
  
  18,750 and 12,000
4.

Kayla’s Toys budgeted sales of $300,000 for the month of November and cost of goods sold to equal of 70% of sales. Beginning inventory for November was $50,000 and ending inventory for November is estimated at $55,000. How much are the budgeted purchases for November?
- A.
  
  $205,000
- B.
  
  $95,000
- C.
  
  $105,000
5.

The Teddy Bear Company manufactures stuffed bears. The number of bears to be produced in the upcoming three months follows: Number of teddy bears to be produced in July 12,000 Number of teddy bears to be produced in August 15,000 Number of teddy bears to be produced in September 10,000 Each bear requires 2 pounds of the plastic pellets used as stuffing. The company has a policy that the ending inventory of plastic pellets each month must be equal to 20% of the following month’s expected production needs. How many pounds of plastic pellets does The Teddy Bear Company need to purchase in August?
- A.
  
  20,000
- B.
  
  24,000
- C.
  
  28,000
- D.
  
  40,000
6.

Latimer Corporation collects 35% of a month’s sales in the month of sale, 50% in the month following sale, and 10% in the second month following sale. The company has found that 5% of their sales are uncollectible. Budgeted sales for the upcoming four months are: August budgeted sales $300,000 September budgeted sales $280,000 October budgeted sales $330,000 November budgeted sales $260,000 The amount of cash that will be collected in November is budgeted to be:
- A.
  
  $91,000
- B.
  
  $284,000
- C.
  
  $285,000
- D.
  
  $289,000
7.

Newton Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $12,000. Budgeted cash receipts are $84,000, while budgeted cash disbursements are $72,000. Newton Company wants to have an ending cash balance of $40,000. The excess (deficiency) of cash available over disbursements for the month would be:
- A.
  
  $24,000
- B.
  
  $(24,000)
- C.
  
  $112,000
- D.
  
  $168,000
8.

Thomario’s Powder Coatings makes payments on its inventory purchases as follows: 25% in the month of purchase, 60% in the following month, and 15% in the second month following purchase. Budgeted inventory purchases for June, July, and August are $15,000, $19,000 and $24,000, respectively. At what amount are cash payments for inventory in August budgeted?
- A.
  
  $18,750
- B.
  
  $19,650
- C.
  
  $8,700
- D.
  
  $7,650
9.

The Cost of Goods Sold, Inventory, and Purchases Budget would most likely be used by
- A.
  
  Campbell's Soup Company
- B.
  
  Toys R Us
- C.
  
  H & R Block
- D.
  
  Both A and B
10.

Strategic planning involves:
- A.
  
  Setting short-term goals that extend one year into the future
- B.
  
  Setting long-term goals that extend 5-10 years into the future
- C.
  
  Setting goals for next month
- D.
  
  Executing directives from the board of directors
11.

Brawny Corporation manufactures benches. Each bench requires .50 direct labor hours in its production. Brawny Corporation has a direct labor rate of $15 per direct labor hour. The production budget shows that Brawny Corporation plans to produce 1,000 benches in March and 1,200 benches in April. What is the total combined direct labor cost that should be budgeted for March and April?
- A.
  
  7,500
- B.
  
  9,000
- C.
  
  33,000
- D.
  
  16,500
12.

Webber Company is preparing its cash budget for the upcoming month. The budgeted beginning cash balance is expected to be $30,000. Budgeted cash receipts are $101,000, while budgeted cash disbursements are $123,000. Webber Company wants to have an ending cash balance of $45,000. How much would Webber Company need to borrow to achieve its desired ending cash balance?
- A.
  
  $8,000
- B.
  
  $23,000
- C.
  
  $37,000
- D.
  
  $53,000
13.

A rolling budget is a budget that:
- A.
  
  Is continuously updated, so that the next 12 months of operations are always budgeted.
- B.
  
  Extends 5-10 years into the future.
- C.
  
  Begins with zero for each expense, and then amounts are added in.
- D.
  
  Is rolled out by upper management.
14.

The budget committee does all fo the following EXCEPT:
- A.
  
  Reviews submitted budgets
- B.
  
  Removes unwarranted slack
- C.
  
  Approves the final budget
- D.
  
  Determines the bonuses awarded to those who achieve budget targets
15.

Which of the following is the starting place for budgeting?
- A.
  
  Last year's budget
- B.
  
  Last year's actual amounts
- C.
  
  Zero
- D.
  
  Any of the above
16.

Blaney Lumber’s forecasted sales for April; May; June; and July are $200,000; $230,000; $190,000; and $240,000; respectively. Sales are 60% cash and 40% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month’s cost of goods sold. All inventory purchases are paid 20% in the month of purchase and 80% in the following month. What is the balance of accounts payable on the June 30 budgeted balance sheet?
- A.
  
  $29,250
- B.
  
  $117,000
- C.
  
  $146,250
- D.
  
  $111,000
17.

Which of the following statements regarding static budgets is TRUE?
- A.
  
  They are designed to estimate revenues only.
- B.
  
  Managers use them to help plan for uncertainties
- C.
  
  They are prepared for a range of activity levels
- D.
  
  They are prepared for one level of sales volume
18.

Sunny Dayz sells bottles of sunscreen lotion for $8.00 each. Variable costs are $4.50 per bottle, while fixed costs are $42,000 per month for volumes up to 20,000 bottles of lotion and $52,000 per month for volumes above 20,000 bottles of lotion. The flexible budget would reflect monthly operating income for 18,000 bottles of lotion and 23,000 bottles of lotion of what dollar amounts?
- A.
  
  $102,000 and $38,500
- B.
  
  $144,000 and $184,000
- C.
  
  $21,000 and $28,500
- D.
  
  $132,000 and $11,000
19.

A flexible budget variance is the difference between:
- A.
  
  Actual results and amounts in the static budget
- B.
  
  Amounts in the flexible budget and the actual results
- C.
  
  Amounts in the flexible budget and the static budget
- D.
  
  The budgeted amounts for each level of sales in the flexible budget.
20.

Which term below is best paired with "a budget for a single unit"?
- A.
  
  Static Budget
- B.
  
  Standard Cost
- C.
  
  Overhead flexible budget variance
- D.
  
  Production volume variance
21.

Use the following information for the next three questions. Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $14.00 per unit, totaled $15.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. 5. What is the sales volume variance for total revenue?
- A.
  
  $110,000 favorable
- B.
  
  $100,000 unfavorable
- C.
  
  $110,000 unfavorable
- D.
  
  $100,000 favorable
22.

Use the following information for the next three questions. Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $14.00 per unit, totaled $15.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. What is the flexible budget variance for variable expenses
- A.
  
  $55,000 favorable
- B.
  
  $50,000 favorable
- C.
  
  $55,000 unfavorable
- D.
  
  $50,000 unfavorable
23.

Use the following information for the next three questions. Zany Brainy projected current year sales of 50,000 units at a unit sale price of $20.00. Actual current year sales were 55,000 units at $22.00 per unit. Actual variable costs, budgeted at $14.00 per unit, totaled $15.00 per unit. Budgeted fixed costs totaled $400,000, while actual fixed costs amounted to $420,000. What is the flexible budget variance for total expenses?
- A.
  
  $55,000 unfavorable
- B.
  
  $75,000 unfavorable
- C.
  
  $55,000 favorable
- D.
  
  $75,000 favorable
24.

If a worker drops the raw material during production and the raw material must be discarded, which variance is directly impacted?
- A.
  
  Materials price variance
- B.
  
  Materials efficiency variance
- C.
  
  Labor price variance
- D.
  
  Labor efficiency variance
25.

A company’s purchasing department negotiates all of the purchasing contracts for raw materials. Which variance is most useful in assessing the performance of the purchasing department?
- A.
  
  Materials price variance
- B.
  
  Materials efficiency variance
- C.
  
  Labor price variance
- D.
  
  Labor efficiency variance