COST ACCOUNTING
THE MASTER BUDGET
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The Financial Budget is prepared prior to the preparation of the Production Budget
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The Financial Budget is prepared before the preparation of the Operational Budget
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The Financial Budget is prepared before the preparation of the Sales Budget
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The Financial Budget is prepared after taking into account the Operational Budget
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Detailed explanation-1: -Thus, the normal sequence of budget preparation is the preparation of the sales budget, then the budgeted income statement, and then the balance sheet.
Detailed explanation-2: -Budgeting for the national government involves four (4) distinct processes or phases : budget preparation, budget authorization, budget execution and accountability. While distinctly separate, these processes overlap in the implementation during a budget year.
Detailed explanation-3: -The financial budget is prepared after the operating budget. The operating budget is expressed both in units and dollars. The first stage in the budgeting process is the preparation of a sales budget. The first stage in the budgeting process is the preparation of a cash collections budget.