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Q12SE

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Horngren'S Financial And Managerial Accounting
Found in: Page 1230

Short Answer

Understanding the components of the master budget The following are some of the components included in the master budget of a merchandising company.

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

List the items of the master budget in order of preparation.

Answer

The master budget of a merchandising company starts with sales budget and ends with budgeted balance sheet.

See the step by step solution

Step by Step Solution

Step 1: Meaning of master budget

The set of budgeted financial statements and supporting schedules for the entire Company; includes the operating, capital, and financial budgets.

Step 2: items of the master budget in order of preparation

b. sales budget

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

g. Selling and administrative expense budget

c. Capital expenditure budget

e. Cash budget

d. Budgeted income statement

a. Budgeted balance sheet


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