Question

The budgeted amount of selling and administrative expense for a period can be found in the

	a.	sales budget.
	b.	cash budget.
	c.	pro forma balance sheet.
	d.	pro forma income statement.

Answer 1

Correct answer--------(d) pro forma income statement.

.

Selling and administrative expense along with all other expense are stated in cash expenses to calculate cash disbursements but cash budget only stated the selling and administrative expense expected to be paid in cash not accrues expense. Cash budget provides the estimate of cash receipts and expense and estimated cash balance.

Sales budget do not provide for selling and administrative expenses.

Proforma income statement provides the estimated selling and administrative expenses whether paid in cash or not .