A plan showing the planned sales units and the revenue to be derived from these sales, and is the usual starting point in the budgeting process, is called the:
A) Operating budget.
B) Business plan.
C) Income statement budget.
D) Merchandise purchases budget.
E) Sales budget.

Question

Quizplus · Accepted Answer

A sales budget is the usual starting point in the budgeting process as it shows the planned sales units and the revenue to be derived from these sales. This allows a company to plan its production, staffing, and purchasing budgets accordingly. Therefore, the best choice is E. Option A, operating budget, includes multiple budgeting components, including sales budget. Option B, business plan, is a broader concept that covers more than budgeting. Option C, income statement budget, focuses on the expected revenues and expenses in a period. Option D, merchandise purchases budget, is not a starting point although it is related to sales budget.

A Plan Showing the Planned Sales Units and the Revenue