What does the master budget typically include?

What does the master budget typically include?

• A. Budgeted P/L, budgeted financial position, and a cash budget
• B. Only the cash budget
• C. The marketing plan
• D. The long-term strategic plan

Answer: (A)

The master budget brings together the detailed operating plans for the period and the financial plans that result from them. It normally includes the budgeted profit and loss (income statement), the budgeted financial position (balance sheet), and a cash budget showing expected cash inflows and outflows. This combination provides both expected performance and the financing implications for the period. The other options miss key parts: a cash budget alone isn’t enough to reflect profitability and the financial position; the marketing plan is a separate functional plan, and the long-term strategic plan sits outside the short-term master budgeting cycle.

The master budget brings together the detailed operating plans for the period and the financial plans that result from them. It normally includes the budgeted profit and loss (income statement), the budgeted financial position (balance sheet), and a cash budget showing expected cash inflows and outflows. This combination provides both expected performance and the financing implications for the period. The other options miss key parts: a cash budget alone isn’t enough to reflect profitability and the financial position; the marketing plan is a separate functional plan, and the long-term strategic plan sits outside the short-term master budgeting cycle.