The First Step in the Budgeting Process Is Commonly

question 58

Multiple Choice

The first step in the budgeting process is commonly:

• A) preparation of the master budget and sub-budgets.
• B) assessment of expected trading and operating conditions.
• C) preparation of initial budget estimates.
• D) consideration of past performance.

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Definitions:

Negotiated Transfer Price

A price for goods or services transferred within a company, determined through negotiation between the selling and buying divisions or subsidiaries.

Negotiating Skills

The abilities and techniques used to effectively persuade or influence others in order to reach a mutual agreement.

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Opportunity Cost

The benefit that is missed or foregone when choosing one alternative over another.