Long-term liability data for the budgeted balance sheet is derived from:
A) The cash budget and capital expenditures budget.
B) The cash budget and sales budget.
C) The cash budget and budgeted income statement.
D) The sales budget and production budget.
E) The asset budget and debt budget.

Question

Quizplus · Accepted Answer

Long-term liabilities are typically associated with financing activities and therefore are derived from the cash budget and capital expenditures budget. The cash budget provides information on the company's cash position, while the capital expenditures budget outlines the company's planned investments in long-term assets. These two budgets allow for the estimation of the company's future long-term financing needs.

Long-Term Liability Data for the Budgeted Balance Sheet Is Derived