Which of the following statements is not correct?
A)The sales budget is the starting point in preparing the master budget.
B)The sales budget is constructed by multiplying the expected sales in units by the sales price.
C)The sales budget generally is accompanied by a computation of expected cash receipts for the forthcoming budget period.
D)The cash budget must be prepared prior to the sales budget because managers want to know the expected cash collections on sales made to customers in prior periods before projecting sales for the current period.

Question

Quizplus · Accepted Answer

The statement in choice D is incorrect. The sales budget is typically prepared before the cash budget, as the sales budget provides information on expected sales for the period, which is necessary in order to project cash collections.

Which of the Following Statements Is Not Correct