Accounting Dictionary - Letter M
is an integrated set of operating and financial projections for a given period (e.g., a forthcoming calendar or fiscal year). A master budget consists of operating and financial budgets. Operating budgets are budgets for functional areas such as production, marketing, customer service, human resources, research and development; they provide the budgeted income statement. The financial budget includes cash budget, capital budget, budgeted balance sheet, and budgeted cash flows. A general sequence of preparing a master budget is as follows: (1) Sales Budget; (2) Projected Cost of Goods Sold; (3) Selling and Administrative Expenses Budget; (4) Other Expenses and Taxes; (5) Projected Income Statement; and (6) Projected Balance Sheet.
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