Select the correct statement about the master budget.
A) The master budget is a group of detailed budgets and schedules representing the company's operating and financial plans for the past accounting period.
B) The master budget usually includes operating budgets and capital budgets and pro forma financial statements.
C) The budgeting process usually begins with preparing the strategic budgets.
D) Preparing the master budget begins with the cash budget.

Question

Quizplus · Accepted Answer

The master budget typically includes both operating and capital budgets, as well as pro forma financial statements. Option A is incorrect because the master budget represents plans for the upcoming accounting period, not the past. Option C is incorrect because the budgeting process usually begins with sales forecasts, not strategic budgets. Option D is incorrect because the cash budget is typically one of the final budgets prepared as part of the master budget process.

Select the Correct Statement About the Master Budget