Why Is the Sales Budget the Single Most Important Source

question 27

Multiple Choice

Why is the sales budget the single most important source in preparing budgets?

• A)All the other budgets depend on it.
• B)It enables the company to determine the unit cost of products.
• C)It is the best determination of profitability of a company.
• D)It is the only budget that requires estimates.

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Definitions:

Effective Rate

The real interest rate on an investment or loan, taking into account the effect of compounding over a given period.

Compounding Interval

The frequency at which interest is added to the principal amount of an investment or loan which can affect the total interest earned or paid.

Compounded Monthly

In finance, it refers to the process of computing interest on an investment or loan on a monthly basis, with each month's interest being added to the principal for the calculation of subsequent interest.

Interest

The cost of borrowing money or the payment received for saving or investing money, typically expressed as an annual percentage of the principal.