Question

Which one of the following terms is applied to the financial planning method which uses the projected sales level as the basis for determining changes in balance sheet and income statement account values?

1) Budgeting
2) Forecasting
3) Cost accounting
4) Financial analysis

Answer 1

The term that is applied to the financial planning method which uses the projected sales level as the basis for determining changes in balance sheet and income statement account values is budgeting.

Step-by-step explanation:

The term that is applied to the financial planning method which uses the projected sales level as the basis for determining changes in balance sheet and income statement account values is budgeting.

Budgeting is the process of creating a detailed plan for how to spend and save money. In this case, the projected sales level is used as the starting point for determining how much money should be allocated to different areas of the business.

For example, if a business expects to increase its sales by 10% in the next year, the budgeting process would involve determining how much of that additional revenue should be allocated to things like hiring new employees, purchasing new equipment, or investing in marketing.