What is the proper preparation sequencing of the following budgets?
1. Budgeted Balance Sheet
2. Sales Budget
3. Selling and Administrative Budget
4. Budgeted Income Statement
A) 1, 2, 3, 4
B) 2, 3, 1, 4
C) 2, 3, 4, 1
D) 2, 4, 1, 3

Question

What is the proper preparation sequencing of the following budgets?
1.	Budgeted Balance Sheet
2.	Sales Budget
3.	Selling and Administrative Budget
4.	Budgeted Income Statement
A)	1, 2, 3, 4
B)	2, 3, 1, 4
C)	2, 3, 4, 1
D)	2, 4, 1, 3

Quizplus · Accepted Answer

The correct sequence starts with the Sales Budget (2), as it estimates the revenue expected. Next, the Selling and Administrative Budget (3) is prepared, which outlines the expected costs of selling and managing the business. The Budgeted Income Statement (4) is then prepared, using information from the sales and selling/administrative budgets to project net income. Finally, the Budgeted Balance Sheet (1) is prepared, using information from the previous budgets to project the financial position at the end of the period.

What Is the Proper Preparation Sequencing of the Following Budgets