ACCT 2013 - Concept 12

1. 1Another name for “pro-forma financial statements” would be:

   1. ACorrected financial statements.
   2. BHistorical-cost financial statements.
   3. CProjected financial statements.
   4. DComputer-generated financial statements.
2. 2There are a number of benefits associated with budgeting. Which of the following is not frequently cited as a benefit of the budget process?

   1. ABudgets can help identify production bottlenecks.
   2. BBudgets are useful tools in performance evaluation.
   3. CBudgets help provide an early warning for periods during which cash may be in short supply.
   4. DBudgets eliminate the opportunity for slack or padding within an organization.
3. 3With the top-down budgeting approach the budget:

   1. AProcess begins with the issuance of general budget guidelines by top management or a budget committee.
   2. BDevelopmental process centers on lower-level employee participation.
   3. CIs imposed on lower-level personnel who do not become involved in the budget construction process in a significant way.
   4. DIs not characterized by sound budget preparation practices.
4. 4Bright Company manufactures mirrors which require 8 square feet of glass per mirror. Bright anticipates production of 500 units in January, 700 units in February, and 1,700 units in March. Bright maintains glass on hand equal to 40% of the following month’s anticipated production requirements. The glass costs $3 per square foot. At the beginning of January, only 500 square feet of glass is on hand. How many square feet of glass should Bright plan to buy in February?

   1. A2,200 square feet
   2. B5,400 square feet
   3. C8,800 square feet
   4. D11,040 square feet
5. 5Hanson anticipates unit sales during the first three months of the upcoming year at 5,000 for January, 4,000 for February, and 8,000 for March. If Hanson wishes to maintain its finished goods inventory at 80% of the following month’s sales, and the January 1 finished goods inventory consisted of 1,000 units, how many units must Hanson produce in January?

   1. A3,200
   2. B6,400
   3. C7,200
   4. D8,000
6. 6O’Connor Corporation had December sales of $30,000. Anticipated sales during January are $40,000, and February sales are projected at $37,500. Of sales made, 40% are for cash and 60% are on account. Sales on account are expected to be collected 50% in the month of sale, 45% in the month following the month of sale, and 5% ultimately prove uncollectible. How much are anticipated cash collections during the month of February?

   1. A$25,800
   2. B$26,250
   3. C$36,100
   4. D$37,050

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ACCT 2013 Quiz on ACCT 2013 - Concept 12, created by Adam Peterson on 22/01/2018.

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