CMA Foundation · Fundamentals of Financial and Cost Accounting · Application of Cost Accounting for Business Decisions
Which budget is the summary budget that combines the functional budgets and includes the budgeted profit and loss account and balance sheet?
The master budget is the summary budget. It consolidates all functional budgets such as sales, production and cash into a budgeted profit and loss account and balance sheet, and serves as the overall target plan for the period.
- ACash budget
- BSales budget
- CMaster budgetCorrect
- DProduction budget
Explanation
The master budget consolidates all functional budgets into a budgeted profit and loss account and balance sheet, and it is approved as the target plan. Cash, sales and production budgets are only individual functional budgets.
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