Question

A cash disbursement for inventory purchases will be included in the:

1)	The Inventory Purchases and Disbursement Budget.

2)	The Cash Collections Budget.

3)	The Cash Budget.

4)

a. and b.

5)

a. and c.

The sales budget does not include:

1)	Budgeted units to be sold.

2)	Budgeted sales price per unit.

3)	Total sales by taking the number of units sold X the sales price.

4)	Estimated cash sales.

In an inventory purchases budget, the way to compute the required units to purchase is to:

1)	Add the expected sales to the beginning inventory and then subtract the desired ending inventory.

2)	Add the beginning inventory to the desired ending inventory and then subtract the expected sales.

3)	Add cash collections to the estimated purchases and then subtract the beginning inventory.

4)	add the expected sales to the desired ending inventory and then subtract the                            beginning inventory.

Answer 1

Solution 1:

A cash disbursement for inventory purchases will be included in the

-the Inventory Purchases and Disbursement Budget

-The Cash Budget

Hence "a and c" are correct.

Option 5th is correct.

Solution 2:

The sales budget does not include "Estimated cash sales".

Hence fourth option is correct.

Solution 3:

In an inventory purchases budget, the way to compute the required units to purchase is to "add the expected sales to the desired ending inventory and then subtract the beginning inventory".

Hence fourth option is correct.