Question

    Budgets serve various purposes and take different forms

    depending on their scope and focus. The budget which usually takes the form of budgeted profit and loss account and balance sheet is known as ___________
    A Flexible budget. Correct Answer Incorrect Answer
    B Master budget. Correct Answer Incorrect Answer
    C Cash budget. Correct Answer Incorrect Answer
    D Purchase budget Correct Answer Incorrect Answer
    E Consolidated budget Correct Answer Incorrect Answer

    Solution

    The master budget is a comprehensive financial planning document that consolidates all other individual budgets, such as sales, production, and overhead budgets, into a budgeted profit and loss account and balance sheet. It provides an overall view of the organization’s financial health and projected performance.

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