Which of the Following Would Be Prepared First When a Merchandising

question 4

Multiple Choice

Which of the following would be prepared first when a merchandising company uses a master budget?

• A) Selling and administrative expense budget
• B) Budgeted income statement
• C) Sales forecast
• D) Inventory purchases budget

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Definitions:

Deposits in Transit

Funds that have been received and recorded by a company but not yet by its bank.

Bank Reconciliation

Process of verifying the accuracy of both the bank statement and the cash accounts of a business.

Bad Debt Expense

This refers to an expense recognized by businesses to account for invoices that are unlikely to be paid by customers.

Income from Operations

The earnings generated from a company's principal business activities, excluding non-operating income and expenses such as interest and taxes.