Which of the following statement is correct?
A)Errors in the sales budget only affect the revenue side of the business.
B)Errors in the sales budget affect both the revenue and expense sides of the firm.
C)By definition there can be no error in the sales budget.
D)All of these.
E)None of these.

Question

Quizplus · Accepted Answer

Errors in the sales budget can affect both the revenue and expense sides of the firm. For example, if the sales forecast is overestimated, the company may overproduce and incur additional costs for inventory storage and management. Alternatively, if the sales forecast is underestimated, the company may miss out on potential revenue opportunities. Therefore, errors in the sales budget can have a significant impact on both the top and bottom line of a firm's financial statements. Choice A is incorrect because errors in the sales budget can affect both revenue and expenses. Choice C is incorrect because errors can occur in any budget, including sales. Choices D and E are also incorrect for the reasons mentioned above.

Which of the Following Statement Is Correct