Higher Accounting - Budgets

Which of the following is NOT a main objective of creating budgets?

• To help plan ahead for the whole business
• To help control by comparing actual with budget
• To help increase participation and motivation of managers
• To meet legal requirements to publish all financial resuls

There are three main types of budget you need to know how to calculate. Which one is calculated by adding purchases to opening inventory and then deducting closing inventory?

• Cash
• Sales
• Production

There are three main types of budget you need to know how to calculate. Which one is calculated by deducting opening inventory from sales and then adding closing inventory?

• Cash
• Sales
• Production

The opening inventory of one month becomes the closing inventory of the next month in sales and production budgets.
True or False?

• True
• False

Depreciation should be included in a cash budget 'overhead' payment figure.

• True
• False

What is the name given to the amount of sales made to customers which is unlikely to be repaid?

• Sales returns
• Purchase returns
• Bad debts
• Write off

Which statement is correct about how to show the amount of sales irrecoverable from customers in a cash budget?

• It should be shown as a negative figure in the Receipts section of the cash budget
• It should be shown as a negative figure in the the Payments section of the cash budget
• It should be deducted from the credit sales figure before sales is written into the cash budget
• It should be added to the purchase of raw materials expense figures before written into the cash budget

Which below is NOT a possible entry in the Receipts section of a cash budget?

• Bad debts figure
• Rental income
• Loan received
• Grant received

Monthly fixed costs are £20,000 excluding depreciation of £5,000.
Which figure should be shown in the Receipts section of the cash budget?

• £20,000
• £25,000
• £15,000
• none of the others

Monthly fixed costs are £20,000 excluding depreciation of £5,000.
Which figure should be shown in the Receipts section of the cash budget?

• £20,000
• £25,000
• £15,000
• none of the others