A Master Budget

question 86

Multiple Choice

A master budget:

• A) indicates costs of the organization only for the coming year.
• B) indicates sales of the organization only for the coming year.
• C) indicates sales, production, and costs of the organization for the coming year.
• D) indicates sales and production but does not address costs of the organization for the coming year.

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Definitions:

Prepaid Insurance

An asset account that represents insurance payments made in advance for coverage extending beyond the current accounting period.

Accounts Payable

Amounts owed by a business to its suppliers shown as a liability on a company’s balance sheet and typically due within a short period of time, often 30 to 90 days.

Equipment

Tangible assets used in the operations of a business, not intended for sale, and depreciated over time.

Drawing Account

An account that tracks the amount withdrawn by the owners from the business for personal use.