A comprehensive or overall formal plan for a business that includes specific plans for expected sales, the units of product to be produced, the merchandise or materials to be purchased, the expenses to be incurred, the long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet, is called a:
A) Master budget.
B) Cash budget.
C) Capital expenditures budget.
D) Rolling budget.
E) Production budget.

Question

Quizplus · Accepted Answer

The comprehensive or overall formal plan described in the question is referred to as a master budget. It includes specific plans for various departments and aspects of the business, and also projects the financial position of the company through budgeted income statements and balance sheets. Option B (Cash budget) is a specific budget that outlines an organization's cash inflows and outflows for a particular period. Option C (Capital expenditures budget) is a budget that outlines the expected purchases of long-term assets, while option D (Rolling budget) refers to a budget that is continuously updated to reflect actual performance and business conditions. Option E (Production budget) is a specific budget that outlines the expected production of units for a given period.

A Comprehensive or Overall Formal Plan for a Business That