In Preparing an Operating Budget, the Sales Budget Is Prepared

question 32

Multiple Choice

In preparing an operating budget, the sales budget is prepared first. Which of the following is prepared next?

• A)Budgeted income statement
• B)Capital expenditures
• C)Inventory, purchases and cost of sales
• D)Electricity and gas

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Definitions:

Straight-Line Depreciation

A technique for distributing the expense of a physical asset evenly across its lifespan in yearly increments.

Depreciation Expense

An accounting method of allocating the cost of a tangible asset over its useful life to account for declines in value.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, reducing its book value on the balance sheet.

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.