Which of the following statements is NOT correct? a. The cash budget must be prepared prior to the sales budget because managers want to know the expected cash collections on sales made to customers in prior periods before projecting sales for the current period. b. The sales budget is constructed by multiplying the expected sales in units by the sales price. c. The sales budget is the starting point in preparing the master budget. d. The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
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.
![Which of the following statements is NOT correct?
a. The cash budget must be prepared prior to the sales budget because managers want to know the expected
cash collections on sales made to customers in prior periods before projecting sales for the current period.
b. The sales budget is constructed by multiplying the expected sales in units by the sales price.
c. The sales budget is the starting point in preparing the master budget.
d. The sales budget generally is accompanied by a computation of expected cash receipts for the
forthcoming budget period.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F769c34ea-f6fe-4997-8d75-18a37dbf4dbe%2Fbe9c31e1-9d36-4327-bc55-db54783ae32f%2Fffjbz6t_processed.jpeg&w=3840&q=75)
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