Which of the Following Statements Is Not Correct

question 13

Multiple Choice

Which of the following statements is not correct?

• A)The sales budget is the starting point in preparing the master budget.
• B)The sales budget is constructed by multiplying the expected sales in units by the sales price.
• C)The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
• D)The cash budget must be prepared prior to the sales budget because managers want to know the expected cash collections on sales made to customers in prior periods before projecting sales for the current period.

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Definitions:

Reserve Requirement

The minimum amount of reserves a bank must hold against deposits, as mandated by the central bank.

Money Supply

The complete portfolio of monetary assets at a fixed point in time within an economy, including cash, coins, and amounts in checking and savings accounts.

Deposits

Funds placed into banking institutions for safekeeping, which can earn interest over time depending on the type of account.

Federal Open Market Committee

The branch of the Federal Reserve System that determines the direction of monetary policy, including decisions on interest rates and the growth of the United States money supply.