Which of the following statements about a budgeted income statement is true?
A)It is prepared before the operating budgets are prepared.
B)It reflects the cash to be received and paid as a result of operations.
C)It is prepared after the cash budget is prepared.
D)It is prepared using the individual operating budgets.

Question

Quizplus · Accepted Answer

A budgeted income statement is prepared using the individual operating budgets such as the sales budget, production budget, direct materials budget, etc. It reflects the projected income and expenses for a specific period and does not include cash inflows and outflows. The cash budget is prepared separately to determine the cash position of the business.

Which of the Following Statements About a Budgeted Income Statement