Question

Regarding the sales budget, which of the following statements is incorrect?

A) The forecast of sales revenue is the cornerstone of the master budget.
B) The level of sales affects expenses and almost all other elements of the master budget.
C) The budgeted sales are carried from the sales budget to the balance sheet.
D) Budgeted total sales for each product equal the sales price multiplied by the expected number of units sold.

Answer 1

Statement C is incorrect in the sales budget as it does not involve carrying budgeted sales from the sales budget to the balance sheet.

Step-by-step explanation:

In the sales budget, statement C is incorrect. The budgeted sales are not carried from the sales budget to the balance sheet. The sales budget is used to forecast future sales and estimate the revenue generated. It is the cornerstone of the master budget, as stated in statement A. The level of sales affects expenses and almost all other elements of the master budget, as mentioned in statement B. Finally, statement D is also correct, as the budgeted total sales for each product is determined by multiplying the sales price by the expected number of units sold.