Final answer:
The final step in creating the master budget is the preparation of the budgeted balance sheet, which represents the company's projected financial position at the end of the budget period.
Step-by-step explanation:
The final step in the process of creating the master budget is the preparation of the budgeted balance sheet. The master budget is an all-encompassing financial planning document that includes several individual budgets. The process typically starts with the sales budget, followed by the production budget (for manufacturing companies), the operating budgets, and the cash budget, which outlines the expected cash inflows and outflows.
The next step usually involves the preparation of the budgeted income statement, which shows the company's projected profits. Finally, all this information is used to prepare the budgeted balance sheet, which provides a forecast of the company's financial position at the end of the budget period, reflecting expected assets, liabilities, and stockholders' equity.