Exercise 3 Multiple Choice: Concepts Name: Section: Score: Instruction: Encircle the letter that corresponds to your answer. Financial Planning and Budgeting 1. Which of the following sections appears on a cash budget? Expenses Financing Revenues Sales ce a . Cash budget Which of the following is a source of information used to prepare the budgeted income statement? es Budgeted balance sheet Capital expenditures budget d. Selling and administrative expense budget 3. Which of the following is a financial budget? a. Capital expenditure budget b. Production budget Manufacturing overhead budget d. Sales budget 4. What is the last step in developing the master budget? Preparing the budgeted balance sheet b. Preparing the cost of goods manufactured budget c. Preparing the budgeted income statement d. Preparing the cash budget 5. Which of the following sets includes only financial budgets? a. Cash budget and the operating budget b. Sales budget and the budgeted balance sheet C. Budgeted balance sheet and the cash budget d. Cash budget and the sales budget 6. Which of the following is one of the main purposes of preparing a cash receipts and disbursements budget? a. To find investment opportunities for anticipated surpluses b. To reconcile cash on hand c. To determine production needed d. To determine how many units need to be sold7. Skate Rink Company revised its sales budget to show a 15% increase in sales. As a result of change, which other budgets would change? All of its other budgets Only its selling and administrative expenses budget It's marketing budget only d. Only its production budget FINANCIAL MANAGEMENT | Part I 8. Which of the following is most likely to happen if the cash receipts from customers are greater the sales? . The company will show a profit. b. The balance of accounts receivable will decrease. The company's outstanding debt will decrease. . d. The company's cash balance will increase. 9. Which one of the following sets includes only financial budgets? Cash budget and the operating budget b. Sales budget and the budgeted balance sheet Budgeted balance sheet and the cash budget 1. Cash budget and the sales budget 10. Which of the following best describes the company's additional fund financing? Growth in assets minus growth in liabilities minus net income Growth in assets minus net income Growth in assets minus growth in current liabilities minus net income d. Growth in assets minus growth in current liabilities minus the year's retained earnings 11. Which of the following will reduce the external funding needs? Decrease profit margins b. Decrease the dividend payout ratio Decrease the retention ratio 1. Decrease in spontaneous liability company's 12. All other things constant, additional debt financing needed will decrease with an increase in the dividend payout return on sales capital intensity ratio answer not given