Question

Financial and managerial accouting questions for my review sheet! i rate well.

Question 56

Select the correct statement. 


A. Four purposes often claimed for budgeting involve planning, coordination, performance measurement, and reporting.

B. In a participative budgeting system, budget information flows in one direction only, from bottom to top.

C. The three major categories of the master budget are operating budgets, capital budgets, and pro forma financial statements.

D. The accounting department normally coordinates the development of the sales forecast.

Answer 1

The correct answer is letter "C": The three major categories of the master budget are operating budgets, capital budgets, and pro forma financial statements.

Step-by-step explanation:

A Master Budget is the compilation of all the budgets different departments of a company must come up with. Besides, the master budget includes the company projected financial statement, financial plan (operating budget with sales, expenses, and administrative projections), and cash-flow (capital budget including the acquisition of machinery, building, and labor).