HOlidays

1. Comment on the following statement: ‘The sales budget is the cornerstone of the budgeting process for a trading firm’.
This statement is true because a sales budget is crucial to the overall budgeting process, as the sales forecasts have a direct link with many of the other types of budgets prepared by management. The estimate of sales also leads to other predictions such as stock requirements, estimated purchases and staffing needs. Once management has made estimates of sales, the future needs of the business in general can be estimated.

2. Describe the two processes involved in the preparations of a sales budget.
Two processes involved in the preparations of sales budgets are:




3. What is a cash budget? What does it show?
A cash budget is an accounting report that shows estimates of cash receipts and cash payments, and an estimated bank balance, at a particular point in time in the future.

4. Outline the importance of cash budgeting when accounting for a tra...