ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following statements is NOT correct?
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The cash budget must be prepared prior to the sales budget because managers want to know the expected cash collections on sales made to customers in prior periods before projecting sales for the current period.
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The sales budget is the starting point in preparing the master budget.
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The sales budget is constructed by multiplying the expected sales in units by the sales price.
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The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
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Explanation:
Detailed explanation-1: -D Point is incorrect. Cash Budget is not prepared prior to the sales Budger, Alt…
Detailed explanation-2: -Option (a) A cash budget sets out all cash receipts and payments that a business expects to make over a period of time is not the correct answer because it is true about the cash budget.
Detailed explanation-3: -Which of the following budgets is not completed before a cash budget is prepared? Answers: General and administrative expense budget.
Detailed explanation-4: -The cash budget is prepared after the operating budgets (sales, manufacturing expenses or merchandise purchases, selling expenses, and general and administrative expenses) and the capital expenditures budget are prepared.
There is 1 question to complete.