ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an interrelated long-term plan and operating budgets.
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financial budgets and a long-term plan
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interrelated financial budgets and operating budgets.
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all the accounting journals and ledgers used by a company.
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Detailed explanation-1: -A master budget consists of a projected income statement (planned operating budget) and a projected balance sheet (financial budget) showing the organization’s objectives and proposed ways of attaining them.
Detailed explanation-2: -The master budget has two major categories: the financial budget and the operating budget. The financial budget plans the use of assets and liabilities and results in a projected balance sheet. The operating budget helps plan future revenue and expenses and results in a projected income statement.
Detailed explanation-3: -A master budget will show all the details of the company’s income-generating actions via the operating budget, with an overview of revenue and expenses. It will also show cash inflows and outflows from the cash flow statement, and estimations of what will appear on the balance sheet at the end of the accounting period.
Detailed explanation-4: -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.