Which of the following statements is true? a. The cost of goods sold budget is prepared before the direct labor and overhead budgets. b. Service firms need not prepare a master budget. c. The production budget is the first budget to be prepared in the master budget. d. The cash budget is prepared before the direct materials purchases budget. e. The budgeted balance sheet is prepared after the cash budget.

Question

Business

Annie Shelton

18 September, 11:15

Which of the following statements is true? a. The cost of goods sold budget is prepared before the direct labor and overhead budgets. b. Service firms need not prepare a master budget. c. The production budget is the first budget to be prepared in the master budget. d. The cash budget is prepared before the direct materials purchases budget. e. The budgeted balance sheet is prepared after the cash budget.

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Answers (1)

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Kelvin Oconnor · Answer 1

The correct answer is e. The budgeted balance sheet is prepared after the cash budget.

Explanation:

The forecasts of a budget balance must consider all the controls and aspects of the operations that should have been recognized in the accounting. In this sense, it is necessary that the cash budget must be established in advance so that when the budget balance is carried out it is possible to determine the degree of compliance with money management policies, and the necessary controls to guarantee compliance during the established period of time.