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

Question

Quizplus · Accepted Answer

The operating budget includes the operating expenses budget, which outlines the expected costs of running the organization during the budget period. The capital expenditures budget outlines planned investments in long-term assets, and the cash budget outlines expected inflows and outflows of cash. The operating budget is a component of the master budget, which also includes the financial budget (including the cash budget) and the capital expenditures budget.

Which of the Following Statements Is TRUE About the Operating