Which of the Following Would Depict the Logical Order for Preparing

question 72

Multiple Choice

Which of the following would depict the logical order for preparing (1) a production budget, (2) a cash budget, (3) a sales budget, and (4) a direct-labor budget?

• A) 1-3-4-2.
• B) 2-3-1-4.
• C) 2-1-3-4.
• D) 3-1-4-2.
• E) 3-1-2-4.

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Definitions:

Direct Write-off

A method of accounting for bad debts where uncollectible accounts receivable are written off directly against income at the time they are deemed nonrecoverable.

Allowance Methods

Accounting techniques used to anticipate and account for future loan losses by establishing an allowance for doubtful accounts.

Bad Debt

Money owed to a company that is unlikely to be paid by the debtor, often leading to the creditor writing it off as a loss.

Percentage of Sales

A method used to forecast financial figures, such as net income or expenses, based on a percentage of the sales volume.