Budgeting..... Help

sgafo Settling In NicelyRegistered Posts: 21
Can anyone help me please I'm stuck on the following question




  • SandyHood
    SandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    Dear sgafo

    Have you taken this from a practice exam?

    In my classes for Budgeting at level 4, this area of knowledge is treated as revision from level 3. All aspects are included at level 3.

    Which account would you debit if you had to allocate (or credit in the case of cash outflows):
    1. Cleaning materials for a production line these are indirect production materials
    2. Factory extension this is the cost of building an extension onto the factory
    3. Telephone bill there might be scope for more than one of the alternatives - but which department would you expect to have the telephone bill as part of its budget?
    4. Replacement sales vehicles Possibly misleading if you can't recognise what a marketing department budget would include. I will give you the answer Capital Expenditure in case you weren't sure. Depreciation of vehicles (not asked for) might be debited to marketing
    5. Hire of delivery vehicles I think the word distribution rather gives the game away!
    6. Payment to suppliers What is a payment? Only one of the 5 alternatives is concerned with cash/bank payments
    7. Raw material usage Where are raw materials used?
    8. Sales force salaries I hope you don't need me to tell a L4 candidate that this would be a marketing department cost.

    If this is all new learning for you, please take stock of your progress on this course. Go back and look over the work you did as you acquired the knowledge needed for your L3 exams.
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