Understanding the components of the master budget The following are some of the components included in the master budget of a merchandising company. Budgeted balance sheet Sales budget Capital expenditures budget Budgeted income statement Cash budget Inventory, purchases, and cost of goods sold budget Budgeted statement of cash flows Selling and administrative expense budget List the items of the master budget in order of preparation.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Understanding the components of the
The following are some of the components included in the master budget of a merchandising company.
- Budgeted
balance sheet - Sales budget
- Capital expenditures budget
Budgeted income statement Cash budget - Inventory, purchases, and cost of goods sold budget
- Budgeted statement of
cash flows - Selling and administrative expense budget
List the items of the master budget in order of preparation.
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