Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Closing Entries

Financial Accounting

3. Accrual Accounting Concepts

Closing Entries

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Multiple Choice

Which of the following represents the correct order in which most master budgets are prepared?

Direct materials budget, production budget, sales budget, cash budget

Sales budget, production budget, direct materials budget, cash budget

Production budget, sales budget, direct materials budget, cash budget

Cash budget, sales budget, production budget, direct materials budget

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Verified step by step guidance

Understand the concept of a master budget: A master budget is a comprehensive financial planning document that includes various individual budgets, such as sales, production, and cash budgets, to coordinate all aspects of an organization's operations.

Recognize the logical sequence of budget preparation: The order of budgets is determined by the flow of information and dependencies between them. For example, the sales budget provides the foundation for the production budget, which in turn informs the direct materials budget.

Step 1: Start with the sales budget. This budget forecasts the expected sales volume and revenue, which is the starting point for all other budgets.

Step 2: Prepare the production budget. Based on the sales budget, the production budget determines the number of units that need to be produced to meet sales demand and maintain inventory levels.

Step 3: Develop the direct materials budget. Using the production budget, calculate the quantity and cost of raw materials required for production. Finally, prepare the cash budget to ensure sufficient liquidity for operations and expenses.