Question

TRUE OR FALSE QUESTION:

Part of the budgeting process is summarizing the financial statement effects on the budged income statement and the budgeted balance sheet.

The production budget cannot be prepared until the direct materials and direct labor budgets are prepared.

The budget process rarely coincides with the accounting period.

Part of the cash budget is based on info taken from the capital expenditures budget.

The budgeted balance sheet is prepared primarily from data contained in the previously prepared components of the master budget.

A budget is a formal statement of future plans, usually expressed in monetary terms.

Standard costs can be used by management to assess the reasonableness of actual costs incurred.

Answer 1

1.) False : Budgeting process is concerned with both financial and non financial statements such as financial records and cost records. summarizing the financial statement effects on budgeted inome statement and the budgeted balance sheet is not correct.

2.) False: the production budget canot be prepared until the sales budget is prepared and then the direct materials and direct labor budget is prepared after the production budget.

3.) False: The budget process usually coincides with the accounting period in some rare situations it may not coincide.

4.) false: The cash budget is prepared after the operating budget and the cash budget is doesnt take info from thr capital expenditure budget.

5.) True: The budgeted financial statement is prepare primarily from the data contained in the previously prepared components of the master budget.

6.) True: A budget is a formal statement of future plans which is usually expressed in monetary terms this is as per the definition of budget.

7.) True: A standard costs are used by the management to assess the reasonableness of actual costs incurred. there is a responsibility of accounting performance report whiich usually compares the actual costs of the budget amounts by the management level.