A Purchases Budget

question 107

Multiple Choice

A purchases budget

• A)does not reflect early payment discounts granted by vendors.
• B)is the same thing as a production budget.
• C)is needed only if a firm does not pay for its merchandise in the same period as it is purchased.
• D)is affected by a firm's inventory policy only if the firm purchases on credit.

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Definitions:

Sales

The total amount received from selling goods or services over a given period.

Residual Income

The income that exceeds the minimum required return on an investment or business segment.

Residual Income

The amount of income that exceeds the minimum rate of return expected on a project or investment.

Required Rate Of Return

The minimum annual percentage return an investor expects to achieve by investing in a particular asset or project.