Which of the following statements is not correct?
A)The sales budget is the starting point in preparing the master budget.
B)The sales budget is constructed by multiplying the expected sales in units by the sales price.
C)The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
D)The cash budget must be prepared prior to the sales budget since managers want to know the expected cash collections on sales made to customers in prior periods before projecting sales for the current perioD.

Question

Quizplus · Accepted Answer

This statement is not correct. The cash budget is actually prepared after the sales budget because the sales budget provides the information on sales volume and timing, which is necessary to estimate cash collections. Therefore, option D is the correct answer.

Which of the Following Statements Is Not Correct