Multiple Choice Questions
27.Mentha Company currently has the following statistics:
Days in inventory - 80
Days in accounts receivable - 68
What is Mentha's operating cycle?
A. 80 days.
B. 68 days.
C. 148 days.
D. Cannot be determined from the information given.
28.Mentha Company currently has the following statistics:
Days in inventory - 80
Operating cycle - 148
What is Mentha's days in accounts receivable?
A. 80 days.
B. 68 days.
C. 148 days.
D. Cannot be determined from the information given.
29.Mentha Company currently has the following statistics:
Days in accounts receivable - 68
Operating cycle - 148
What is Mentha's days in inventory?
A. 80 days.
B. 68 days.
C. 148 days.
D. Cannot be determined from the information given.
30.The benefits of budgeting include all of the following
except:
A. Enabling the company to produce more for less cost.
B. Assigning responsibility for situations that require corrective action.
C. Coordinating activities between departments within the organization.
D. Creating standards for evaluating performance.
31.Which of the following is
not
a benefit of a careful and thorough budgeting process?
A. Budgeting increases management's awareness of the company's external economic environment.
B. Budgeted net income assures the company of operating profitably.
C. The budget may provide advance warning of pending problems.
D. Budgets provide a yardstick for evaluating future performance.
32.Benefits derived from budgeting do
not
include:
A. Improved relationship with shareholders.
B. Enhanced management responsibilities.
C. Improved coordination of activities.
D. Enhanced performance evaluations.
33.The most widely used budgeting philosophy is the:
A. Operational approach.
B. Behavioral approach.
C. Strategic approach.
D. Tactical approach.
34.A budget that adds a new month when the current month ends is called a:
A. Capital budget.
B. Master budget.
C. Rolling budget.
D. There is no such budget.
35.Which philosophy in setting budgeted amounts assumes both the complete elimination of inefficiencies and a level of absolute efficiency?
A. The behavioral approach.
B. The total quality management approach.
C. The strategic approach.
D. The master budget approach.
36.Which of the following is
not
a characteristic of the total quality approach to setting budgetary targets?
A. Absolute efficiency.
B. A perception that the budget is fair.
C. Budgetary targets that are unattainable.
D. Budgeted performance expectations that cannot be exceeded.