Select the correct statement regarding the selling and administrative (S&A)expense budget.
A) The S&A budget is prepared after the sales budget.
B) The S&A budget is prepared before the cash budget.
C) The S&A budget is prepared before the pro forma income statement.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

The S&A budget is indeed prepared after the sales budget because it often depends on the sales volume. It is also prepared before the cash budget, as it helps in determining the cash outflows related to selling and administrative activities. Additionally, it is prepared before the pro forma income statement because it provides necessary expense information that feeds into the income statement.

Select the Correct Statement Regarding the Selling and Administrative (S&A)expense