There Are Various Budgets Within the Master Budget

question 25

Multiple Choice

There are various budgets within the master budget.One of these budgets is the production budget.Which of the following best describes the production budget?

• A) It details the required direct labour hours.
• B) It details the required raw materials purchases.
• C) It is calculated based on the sales budget and the desired ending inventory.
• D) It summarizes the costs of producing units for the budget period.

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Definitions:

Permanent Accounts

Balance sheet accounts whose balances are carried forward to the next accounting period, including assets, liabilities, and equity accounts.

Temporary Accounts

Accounts that track financial results for a specific period before being reset by transferring the balance to permanent accounts, including revenue, expense, and dividend accounts.

Trial Balance

A bookkeeping worksheet where the balances of all ledgers are compiled into debit and credit columns to ensure accuracy in the accounts.

Additional Accounts

Accounts that are created to track or manage specific financial transactions not covered by the standard set of accounts.