Accounting 202: Chapters 7-9

Study Guide

 

        I.            Twenty five (25) multiple-choice questions worth two (2) points each for a total of 50 points.

a.       All questions are completion; no calculation questions in the multiple-choice section.

b.      Know all of the various types of budgets and what they involve; master, strategic, operations, capital, etc.

c.       Order of budget building; for example, what do you do first?  Sales budget.  Then what is next?

d.      Flexible budgets and how do they differ from static budgets?  How are they similar?

e.      What are variances and what determines whether the variances are favorable or unfavorable for revenue and costs?

f.        Know what is meant by decentralization and what are the advantages of decentralization?

g.       What is meant by responsibility accounting and what are some examples of responsibility centers?

 

      II.            Short problems and exercises.

 

a.       Preparation of a sales budget for a quarter (10 points).

 

b.      Preparation of a cash receipts budget for a quarter (12 points).

 

c.       Completion of the blank spaces in a flexible budget variance problem and assessing the company’s performance from your answers (16 points)

 

d.      Calculation of margin, asset turnover, and return on investment of a company (12 points).