The terms are: -Budget -Budgeted balance sheet -Budgeted income statement -Cash

ID: 2551867 • Letter: T

Question

The terms are: -Budget -Budgeted balance sheet -Budgeted income statement -Cash Budget -General and administrative expense budget -Master budget -Merchandise purchases budget -Safety stock -Sales budget Exercise 7-2 Master budget definitions LO C2 Select each of the terms with the best description of its purpose. Definitions erms A comprehensive business plan that includes specific plans for expected sales, the units of 1 product to be produced, the merchandise or materials to be purchased, the expenses to be incurred, the long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet 2 A quantity of inventory or materials over the minimum to reduce the risk of running short A pian showing the units of goods to be sold and the sales to be denived, the usual starting point in the budgeting process An accounting report that presents predicted amounts of the company's revenues and expenses for the budgeting period An accounting report that presents predicted amounts of the company's assets, liabilities, and Budgeted balance sheet 5. 6. 7. A formal statement of a company's future plans, usually expressed in monetary terms 8 A plan that shows predicted operating expenses not included in the selling expenses budget 9 including receipts from any loans needed to maintain a minimum cash balance and equity balances at the end of the budget period A plan that shows the units or costs of merchandise to be purchased by a merchandising company during the budget period Budget A plan that shows the expected cash inflows and cash outflows during the budget period repayments of such loans

Explanation / Answer

Definitions

Terms

A comprehensive business plan that includes specific plans for expected sales, the units of product to be produced, the merchandise or materials to be purchased, the expenses to be incurred, the longterm assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet.

Master budget

A quantity of inventory or materials over the minimum to reduce the risk of running short.

Safety stock

A plan showing the units of goods to be sold and the sales to be derived the usual starting point in the budgeting process.

Sales budget

An accounting report that presents predicted amounts of the company’s revenues and expenses for the budgeting period.

Budgeted income statement

An accounting report that presents predicted amounts of the company’s assets, liabilities, and equity balances at the end of the budget period.

Budgeted balance sheet

A plan that shows the units or costs of merchandise to be purchased by a merchandising company during the budget period.

Merchandise purchases budget

A formal statement of a company’s future plans, usually expressed in monetary terms.

Budget

A plan that shows predicted operating expenses not included in the selling expenses budget.

General and administrative expense budget

A plan that shows the expected cash inflows and cash outflows during the budget period, including receipts from any loans needed to maintain a minimum cash balance and repayments of such loans.

Cash budget