Question

Which of the following(s) is/are used as the basis for the preparation of the budgeted income...

Which of the following(s) is/are used as the basis for the preparation of the budgeted income statement?

Financial budgets
Operating budgets
Sales forecasts
Master budget
Participative budgeting
Long-range planning

Business   Accounting   
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Answer #1

For the preparation of the budgeted Income Statement Master Budget and Sales Forecasts are used . Master budget consists of various budgets such as  Sales Budget in Units & Dollar , Collection of Sales, Budgeted production, Budgeted Raw Material Purchase , Payment schedule for Purchases, Budgeted Labour hours & Amount , Budgeted Overhead, Budgeted Sellling & Administration , Cash Budget. After that we prepare the budgeted Income income statement.

Sale forecast is used to prepare the Sales Budget being part of Master Budget.

Correct answer is option 3 & 4 (i.e. Sales Forecast and Master Budget).

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