In a master budget,a capital budget is used to prepare the ________.
A) sales budget
B) budgeted income statement
C) purchases and cost of goods sold budget
D) cash budget

Question

Quizplus · Accepted Answer

A capital budget is used to plan for the long-term investments in fixed assets like property, equipment, or vehicles. It helps to estimate the cash flows required for these investments over the budget period, which is then incorporated into the cash budget. Therefore, the correct answer is D, the cash budget. The sales budget is prepared to estimate the anticipated sales revenue, the budgeted income statement involves estimating the anticipated revenues and expenses, and the purchases and cost of goods sold budget is used to calculate the cost of goods sold and purchase requirements based on sales estimates.

In a Master Budget,a Capital Budget Is Used to Prepare