Question

which of the following would represent the order in which most master budgets are prepared? a. sales forecast, income statement, cash budget, operating budgets b. operating budgets, cash budget, sales forecast, income statement c. operating budgets, sales forecast, cash budget, income statement d. sales forecast, operating budgets, income statement, cash budget

Answer 1

The correct order of preparing most master budgets is operating budgets, sales forecast, cash budget, income statement. Therefore, the correct option is C.

Step-by-step explanation:

The correct order in which most master budgets are prepared is c. operating budgets, sales forecast, cash budget, income statement. The process typically starts with preparing the operating budgets, which include budgets for sales, production, and manufacturing.

Next, the sales forecast is prepared to estimate anticipated sales for the upcoming period. This is followed by the cash budget, which outlines projected cash inflows and outflows. Lastly, the income statement is prepared to show the anticipated profits or losses based on the budgeted figures.