Which of the Following Is True of the Sales Budget

question 56

Multiple Choice

Which of the following is true of the sales budget?

• A) It provides sales data that is used to prepare financial statements for external reporting purposes.
• B) It captures the variable and fixed expenses of the business.
• C) It is used in the production budget.
• D) It shows the cost of expected production in a period.

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Definitions:

Periodic Inventory System

A method of inventory valuation in which physical inventory is counted at specific intervals and cost of goods sold is calculated periodically.

Specific Invoice Method

An accounting approach to valuing inventory that tracks the cost of each specific item in inventory and is sold.

Ending Inventory

Ending inventory is the value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.

Periodic Inventory System

A method used in accounting to update inventory and cost of goods sold periodically at the end of each accounting period rather than after each sale.