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

Quizplus · Accepted Answer

The Sales Budget and Selling and Administrative Budget need to be prepared before the Budgeted Income Statement, as they provide the necessary information for the income statement. The Budgeted Balance Sheet is prepared after the other budgets, as it takes into account the expected financial position at the end of the budget period, based on the other budgets. Therefore, the proper preparation sequencing is 2 3 4 1.

What Is the Proper Preparation Sequencing of the Following Budgets