Question

A company has prepared the operating budget, the cash budget, and the budgeted income statement and is now preparing the budgeted balance sheet. The balance of Retained Earnings can be taken from the ________.

A) inventory, purchases, and cost of goods sold budget
B) operating budget
C) cash budget
D) budgeted income statement and the balance sheet of the previous year

Answer 1

The balance of Retained Earnings can be taken from the budgeted income statement and the balance sheet of the previous year.

Step-by-step explanation:

The balance of Retained Earnings can be taken from the budgeted income statement and the balance sheet of the previous year. Retained Earnings is a component of the equity section of the balance sheet, and it represents the cumulative profits or losses that haven't been distributed to the shareholders as dividends. It is carried forward from the previous year's balance sheet and is typically adjusted for the current period's net income or loss.