ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cash budget, Sales budget, production budget
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All the production, selling and cost budgets for the organisation.
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The budgeted income statement and the budgeted balance sheet, sales budget
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The cash budget, the budgeted income statement and the budgeted balance sheet
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Detailed explanation-1: -There are three main components to a master budget. Operating budgets cover the general company expenses and income. Capital expenditure budget covers longer term asset and project costs. Financial budgets deal with cash flows and company financial data.
Detailed explanation-2: -Financial budget It factors in assets, liabilities, and stakeholder’s equity-the important components of a balance sheet, which give you an overall idea of your business health.
Detailed explanation-3: -The three steps in the master budgeting process are to develop the (1) revenue and expenditure operating budgets, (2) capital expenditures budget, and (3) financial budgeted cash flow, income statement, and balance sheet. Why is the capital expenditures budget the most important budget?
Detailed explanation-4: -The master budget is the aggregation of all lower-level budgets produced by a company’s various functional areas, and also includes budgeted financial statements, cash forecast, and a financing plan.