Which of the following alternatives reflects the proper order of preparing components of the master budget?
1)Financial budget
2)Operating budget
3)Capital expenditures budget

Question

Which of the following alternatives reflects the proper order of preparing components of the master budget? 
1)Financial budget
2)Operating budget
3)Capital expenditures budget

Quizplus · Accepted Answer

The proper order is to first prepare the Operating Budget, which includes sales, production, and other operational aspects. Next is the Capital Expenditures Budget, which outlines planned investments in long-term assets. Finally, the Financial Budget is prepared, which includes the cash budget, budgeted balance sheet, and budgeted income statement.

Which of the Following Alternatives Reflects the Proper Order of Preparing