Which of the following statements is correct?
A) GST can be ignored when preparing budgets.
B) Most firms prepare cash budgets for periods of 5 years or more.
C) The bank figure in the budgeted balance sheet comes from the cash budget.
D) Budgeted retained profits is calculated as opening balance plus budgeted profit plus budgeted dividends.

Question

Quizplus · Accepted Answer

The bank figure in the budgeted balance sheet comes from the cash budget. This is because the cash budget calculates the expected cash inflows and outflows, which ultimately affect the final cash balance in the bank. 
Option A is incorrect as GST is an important factor that needs to be considered while preparing budgets. 
Option B is incorrect as it is rare for firms to prepare cash budgets for such long periods. Typically, cash budgets are prepared for shorter periods. 
Option D is incorrect as budgeted retained profits are calculated as opening balance plus budgeted profit minus budgeted dividends.

Which of the Following Statements Is Correct