The Inventory Purchases Budget Is Based on Which Budget

question 106

Multiple Choice

The inventory purchases budget is based on which budget?

• A) Cash budget
• B) Sales budget
• C) Selling and administrative expense budget
• D) None of the above answers are correct.

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Definitions:

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Net Realizable Value

The estimated selling price of inventory in the ordinary course of business minus any costs for completion, disposal, and transportation.

Bad Debt Expense

A financial accounting concept representing the amount of revenue considered uncollectible from customers or clients.

Percent Of Sales Method

A financial forecasting model that estimates future financial statements based on assumed sales growth and historical financial ratios.