COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Factory overhead budget.
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Cash budget.
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Merchandise purchase budget.
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Budget balance sheet.
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Budget income statement.
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Detailed explanation-1: -What are Budgeted Financial Statements? Budgeted financial statements contain the expected financial results, financial position, and cash flows of a business. These budgeted financials include an income statement, balance sheet, and statement of cash flows.
Detailed explanation-2: -The budgeted income statement is prepared under the accrual basis of accounting.
Detailed explanation-3: -A budgeted income statement lists the estimated revenue, expenses and profit for a given period. Also known as a profit and loss forecast, this financial report is based on predictions, not on historical data. Generally, it takes into account a company’s previous financial results and its budget for the coming year.
Detailed explanation-4: -An income statement shows profitability while a cash flow statement shows liquidity. Many income items are also cash inflows.