The First Step in Creating the Master Budget Is the Creation

question 6

Multiple Choice

The first step in creating the master budget is the creation of the

• A) production budget.
• B) direct labor budget.
• C) cash budget.
• D) sales budget.
• E) budgeted income statement.

---

Definitions:

Measurement

The process of quantifying qualitative financial data in monetary terms through various accounting methods.

Going Concern Assumption

The assumption that the entity will continue to operate for the foreseeable future.

Historical Costs

The original monetary value at which an asset was bought or a liability was incurred.

Liquidation

The process of closing a business, selling its assets, and using the proceeds to pay creditors, with any leftovers distributed to shareholders.