Question

The following are some of the components included in the master budget of a merchandising company. List the items of the master budget in order of preparation. a. Budgeted balance sheet b. Sales budget c. Capital expenditures budget d. Budgeted income statement e. Cash budget f. Inventory, purchases, and cost of goods sold budget g. Selling and administrative expense budget

Answer 1

Items of the master budget in order of preparation:

b. Sales budget

f. Inventory, purchases, and cost of goods sold budget

g. Selling and administrative expense budget

c. Capital expenditures budget

e. Cash budget

d. Budgeted income statement

a. Budgeted balance sheet

Step-by-step explanation:

In a master budget, the first is the sales budget. It forms the nucleus for the preparation of other budgets. The sales targets determine the production requirements. From the production, inventory, or purchase budgets, other budgets will be formed sequentially. All are directed at meeting the needs of customers as captured in the sales budget. Lastly, the financial statements budgets are prepared, which include the income statement and the balance sheet.