A company has prepared the operational budget and the cash budget and is now preparing the budgeted balance sheet.To provide the balance for Accounts receivable,which document should be used?

Question

Quizplus · Accepted Answer

The budgeted balance sheet requires accurate forecasting of all assets, liabilities and equity. Accounts receivable is an asset, therefore the best choice to determine the balance for Accounts receivable is by using the Sales budget plus budgeted cash collections. This will provide an estimate of how much cash is expected to be collected from credit sales, which can then be used to calculate the balance of accounts receivable. The cash budget, inventory, purchases and cost of sales budget, and electricity and gas budget do not directly provide information about accounts receivable.

A Company Has Prepared the Operational Budget and the Cash