What Is the Sequence of Steps(order of Preparation)for the Operating

question 72

Multiple Choice

What is the sequence of steps(order of preparation) for the operating budget?

• A) sales budget, operating expense budget, purchases and cost of goods sold budget
• B) sales budget, capital budget, operating expense budget
• C) sales budget, purchases and cost of goods sold budget, schedule of cash collections from customers, operating expense budget
• D) sales budget, schedule of cash collections from customers, purchases and cost of goods sold budget, schedule of cash disbursements for purchases, operating expense budget

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Definitions:

Cash Received

Represents the total amount of money received by a company during a specific period, including all sources of cash income.

Capital Expenditures

Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Additions

Refers to increases or expenses added to a specific account, often relating to assets like buildings or equipment.

Extraordinary Repairs

Infrequent expenditures that extend an asset’s life (such as a new engine in a car).