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The last step in the preparation of the master budget is the budgeted balance sheet. True...

The last step in the preparation of the master budget is the budgeted balance sheet.

True or False

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Answer #1

True.

The master budget includes operating budget, capital expenditure budget and all lower level budgets including financial plan and financial statements. Hence after the labour, material, overheads and other cost budgets have been prepared, the cash budget is prepared and finally the income statement and balance sheet are prepared based on the other budgets. Hence balance sheet is the last step which cannot be prepared till all the other budgets are prepared.

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