Which of the following statements is not correct?
A. The sales budget is the starting point in preparing the master budget.
B. The sales budget is constructed by multiplying the expected sales in units by the sales price.
C. The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
D. 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.
Answer: D. 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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Accounting Chapter 8
- Which of the following is not correct regarding the manufacturing overhead budget?
- Which of the following represents the correct order in which the indicated budget documents for a manufacturing company would be prepared?
- In the selling and administrative budget, the non-cash charges (such as depreciation) are added to the total budgeted selling and administrative expenses to determine the expected cash disbursements for selling and administrative expenses.
- Both variable and fixed manufacturing overhead costs are included in the manufacturing overhead budget.
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.