BKAL 1013 BUSINESS ACCOUNTING 

TUTORIAL 7, TOPIC 10 – BUDEGETING

Date Distribution: 19 December 2019
Date Submission: 22 December 2019

1. In the budgeting process, human behaviour problems can arise under these situations
EXCEPT: 
A.     the budget goal is too tight 
B.     the budget goal is too loose 
C.     employees also involved in establishing a reasonable budget 
D.     the budget goals of the business conflict with the objective of the employee          
 
2. The cash budget contains these three sections EXCEPT: 
A. capital expenditures 
B. cash receipts 
C. cash payments 
D. financing 
 
3. One of the items to be considered in the preparation of a purchase budget is: 
A. beginning and ending inventories 
B. total credit sales 
C. total cash receivables 
D. total accounts payable 
 
4. Seri Ceria Bhd has estimated total sales of 500,000 units for the coming year.  The
estimated inventory at the beginning of the year is 45,000 units, while the desired
inventory at the end of the year is 60,000 units.  The total production for the year is
budgeted at: 
A. 485,000 units 
B. 560,000 units 
C. 605,000 units 
D. 515,000 units 
 
5. The master budget for a merchandising firm integrates these budgets EXCEPT: 
A. sales budget 
B. sinking cost budget 
C. inventory budget 
D. selling and administrative expenses budget    
 
6. Budget planning is BEST explained as: 
A. coordinating business activities 
B. establishing specific goals for future operations 
C. Executing actions in the process of attaining goals 
D. periodically evaluating actual performance and goals 
 

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7. The benefit(s) of budgeting is/are: 
A. management can evaluate the business operations against some norm 
B. attitudes of employees are affected by the performance evaluation by
management 
C. a written budget is best way of communicating the management’s specific goals to
employees 
D. all of the above 

8. The benefit(s) and importance of budgeting are as follows, EXCEPT:  

A. written budget is the best way of communicating management’s specific goals to
employees. 
B. provide crucial information for potential shareholders. 
C. Management can evaluate the business operations against some norms. 
D. Attitudes of employees are affected by the performance evaluation by  
management. 
 
9. The phrase “Adding a new budget each period so that the budgets always cover the
same number of future period” BEST described which of the followings: 
 
A. balanced budgeting 
B. continuous budgeting 
C. participatory budgeting 
D. capital budgeting 
  
10. A common practice in most companies when preparing their annual budgets is to begin
with the ___________.  
 
A. inventory budget 
B. purchases budget 
C. sales budget 
D. cash budget 
 
11. A cash budget consists the following segments, EXCEPT: 
 
A. investment 
B. financing 
C. cash receipts 
D. cash disbursements 

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12. A zero-based budget provides a fresh view of operations for each year. Which of the
followings are components of a zero-based budget? 
 
i. Continuous budget 
ii. Static budget 
iii. Master budget 
iv. Flexible budget 
 
A. i and iv 
B. ii and iii 
C. iii andi v 
D. ii and iv 
  
13. The followings are objectives of budgeting EXCEPT: 
 
A. developing appropriate organizational information 
B. executing strategy to achieve organizational goals 
C. establishing organizational goals 
D. periodically compare organizational actual achievement with their goals 
 
14. GoMore Enterprise projected a sales volume of RM600,000 for the festive season at the
end of May 2019. The inventory at the beginning of the month are estimated at
RM70,000 while the month end balance targeted at RM100,000. If the cost of goods
sold is set at 35% from sales, what would be the budgeted cost of purchases for May
2019? 
 
A. RM180,000 
B. RM240,000 
C. RM470,000 
D. RM630,000 
 
15. Schooldayz Sdn. Bhd. (SSB) purchased RM42,000 of various school uniforms in
November 2018. At the beginning of the month, the inventory on hand was RM18,000.
On 30 November, the available inventory was RM12,000. Determine SSB’s budgeted
cost of goods sold for November 2018. 
 
A. RM30,000 
B. RM42,000 
C. RM48,000 
D. RM54,000 
 
16. Tow You Enterprise (TYE) credit sales are based on a policy of 70% payment due
within the month of purchase while the balance is due in the month after. The total sales
for January was RM180,000 while February’s was RM210,000. Determine TYE’s
budgeted cash collection for February.   
 
A. RM54,000 
B. RM147,000 
C. RM201,000 
D. RM210,000 

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17. Bella Chan & Partners’ (BCP) targeted credit purchases of shawls and cosmetics from
their suppliers are as follows: 
 
January RM120,000 
February RM100,000 
March RM140,000 
 
BCP has maintained a payment structure of 50% in the month of purchase while the
balance is equally paid in the next two months. Determine BCP’s expected payment for
March. 
 
A. RM120,000 
B. RM125,000 
C. RM145,000 
D. RM180,000 

18. Which of the followings is FALSE statement?  

 
A. Cash sales are made when cash is received at the same time as the goods or
services are delivered. 
B. Credit sales are made when the payment is received after the goods or services
have been delivered. 
C. Credit purchases are where the goods or services have not yet been received by
the business and payment has not yet been made. 
D. Cash purchases are those purchases for which cash payment will be made at the
same time as the goods or services are received. 

19. Bitterbytes Enterprise budgets January sales at 10,000 units for the price of RM100 per
unit. Its gross profit rate is 25% of sales. The beginning inventory consisted of 2,000
units, however Bitterbytes Enterprise desired to have 2,500 units of inventory on hand
by the end of January. How many units of inventory should Bitterbytes Enterprise plan
to purchase in January?  

A. 10,500 units 
B. 9,500 units 
C. 8,000 units 
D. 7,000 units 
 
20. Chill Mann Sdn Bhd is a one-stop shop for high-quality reusable shopping bags is
preparing its budget for July, August and September 2018. The cost of goods sold for
June 2018 is RM30,000 (RM3 per unit). The business estimates it will sell shopping
bags 10% higher than its previous month sales. It is estimated that both sales and
purchases price are remains unchanged at RM6 and RM3 per unit respectively. The total
expected sales for the 3 months (July, August and September) are:  
 
A. RM218,460 
B. RM180,000 
C. RM198,000 

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 D. RM109,230

PART B: STRUCTURED QUESTION 

ABX Sdn Bhd, a laboratory wholesale supplier, was established on September 1, 2019.
Projected sales for each of the first three months of operations are as follows: 

September   RM450,000 
October RM520,000 
November RM560,00 

The company expects to sell 10% of its merchandise for cash. Of sales on account, 50% are
expected to be collected in the month of the sale, 40% in the month following the sale, and the
remainder in the second month following the sale. 

REQUIRED: 

Prepare a schedule indicating cash collections from sales for September, October and
November 2019.  

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 TUTORIAL 7 ANSWER SHEET 

DUE DATE: 22 DECEMBER 2019 

Group: ___F____

Matric No: ____270407______    Name: _____________YAP MAN YEE____________

PART A: 10 MULTIPLE CHOICE QUESTIONS 

 1.  C
2.   A
3.   A
4.   D
5.   B
6.   B
7.   D
8.   B
9.   B
10.   C
11. A
12. D
13. A
14. B
15. C
16. C
17. A
18. C
19. C
20. A

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PART B: STRUCTURED QUESTION 

  September October November

(RM) (RM) (RM)
Receipts from cash sales:      
Cash sales (10% x current month's 45000 52000 56000
sales)
       
Receipts from sales on account:      
Collections from current month's sales 202500 234000 252000
(50%)
Collection from prior month's sales 0 162000 187200
(40% of previous month's credit sales)
Collection from prior two month’s 0 0 40500
sales (10% of previous two month’s
cedit sales)
Total receipts from sales on account 202500 396000 479700
Total cash receipts 247500 448000 535700

450000x10%=45000
520000x10%=52000
560000x10%=56000

450000x90%x50%=202500
520000x90%x50%=234000
560000x90%x50%=252000

450000x90%x40%=162000
520000x90%x40%=187200

450000x90%x10%=40500