The first step in the budgeting process is the preparation of the
A)production budget.
B)selling and administrative expenses budget.
C)sales forecast.
D)cash budget.

Question

Quizplus · Accepted Answer

The first step in the budgeting process is to prepare a sales forecast. This is because the sales forecast drives all other budgets and estimates in the budgeting process. Without a sales forecast, the organization would not know how much to spend on production, selling and administrative expenses, capital expenditures, or financing. Therefore, a sales forecast is the starting point for all budgeting activities.

The First Step in the Budgeting Process Is the Preparation