ECONOMICS

Detailed explanation-1: -Answer and Explanation: The above statement is false. Reason: The above statement is false because a master budget is prepared by the company reflects the impact of both operating and financing decisions. Budget includes all financial aspects of the organizational plans.

Detailed explanation-2: -The Master Budget contains two main parts called the Operating Budget and the Financial Budgets respectively. An operating budget is a detailed statement showing all the operational expenses and revenues (income) expected during a particular period of time.

Detailed explanation-3: -Cost Accounting A master budget means a budget that not only includes financial aspects but also includes non-financial aspects as well. It is the summation of all budgets prepared by the company’s subsidiary divisions.

Detailed explanation-4: -The statement “The master budget, sometimes referred to as the annual budget, is a comprehensive set of budgets that provides coverage of an organisation’s activities.” is true because the statement talks about the definition of a master budget.

Detailed explanation-5: -The planned operating budget helps to plan future earnings and results in a projected income statement. The financial budget helps management plan the financing of assets and results in a projected balance sheet.