Multiple Choice
Which of the following is the best strategy to avoid paying interest on your credit cards, according to EverFi?
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1. Introduction to Accounting
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Budgeted expenses for areas other than manufacturing are shown on the ______ budget.
A
Cash
B
Production
C
Direct materials
D
Operating
Verified step by step guidance1
Understand the concept of budgeting in financial accounting. Budgets are financial plans that estimate income and expenses over a specific period.
Learn about the different types of budgets: Cash budget, Production budget, Direct materials budget, and Operating budget. Each serves a specific purpose in financial planning.
Recognize that the Operating budget includes all budgeted expenses for areas other than manufacturing, such as administrative, selling, and general expenses.
Differentiate the Operating budget from other budgets: The Cash budget focuses on cash inflows and outflows, the Production budget estimates production levels, and the Direct materials budget calculates the cost of materials needed for production.
Conclude that the correct answer is 'Operating budget' because it encompasses non-manufacturing expenses, aligning with the problem's context.
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