The two main components of the master budget are the ________.
A) cash budget and the capital budget
B) purchases budget and the budgeted income statement
C) budgeted income statement and the budgeted balance sheet
D) operating budget and the financial budget

Question

Quizplus · Accepted Answer

The two main components of the master budget are the operating budget, which includes the budgets for sales, production, direct materials, direct labor, and overhead, and the financial budget, which includes the cash budget, budgeted income statement, and budgeted balance sheet. Therefore, option D is the correct answer. Option A is incorrect because the capital budget is only a part of the financial budget. Option B is incorrect because the purchases budget is only a part of the operating budget, and the budgeted income statement is a part of the financial budget. Option C is incorrect because the budgeted income statement and the budgeted balance sheet are both parts of the financial budget.

The Two Main Components of the Master Budget Are the ________