ACCA Applied Knowledge · Management Accounting · Budget preparation
The master budget of Orwell Co consists of which of the following?
The master budget combines the budgeted statement of profit or loss, the budgeted statement of financial position and the cash budget. It summarises all the functional budgets before the period starts, so it is not a flexed budget or a single functional budget.
- ABudgeted statement of profit or loss, budgeted statement of financial position and cash budgetCorrect
- BOnly the sales and production budgets
- COnly the cash budget
- DThe flexed budget prepared after actual activity is known
Explanation
The master budget summarises the functional budgets into a budgeted profit or loss account, budgeted statement of financial position and cash budget. It is prepared before the period, so it is not the flexed budget. It is more than a single functional budget.
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