Which of the following statements is TRUE of the operating budget?
A) It is a part of the financial budget.
B) It includes the capital expenditures budget.
C) It includes the sales budget.
D) Its final component is the cash budget.

Question

Quizplus · Accepted Answer

The operating budget includes the sales budget, which outlines the forecasted sales revenue for the period covered by the budget. Option A is incorrect because the operating budget is a part of the master budget, which includes both financial and operational budgets. Option B is incorrect because capital expenditures are not related to day-to-day operations covered by the operating budget. Option D is incorrect because while the cash budget may be prepared after the operating budget, it is not necessarily the final component.

Which of the Following Statements Is TRUE of the Operating