Question

Which of the following statements is not correct? a. The sales budget is the starting point...

Which of the following statements is not correct?

a.

The sales budget is the starting point in preparing the master budget.
b.

The sales budget is constructed by multiplying the expected sales in units by the sales price.
c.

The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
d.

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.
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Answer #1

Answer:d.

d.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.

a.Sales Budget is starting point in preparing master budget.The sales budget guides the rest of the budgeting process because the level of production, and therefore the cash needed for production, is directly dependent on the level of sales forecast.

b.The sales budget is constructed by multiplying the expected sales in units by the sales price.sales budget comprises of units sold x selling price

c.The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.- Cash collections give an idea of available cash for cash budget.

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