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Commercial Studies [2 Mark Question Answer]

BUDGETING · ICSE STD 10 (ICSE - English Medium). 15 questions.

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[2 Mark Question Answer]

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15 questions · timed · auto-graded

Question 92 Marks
"Master Budget is also known as summary Budget." Explain
Answer
The master budget is a summary of all budgets. Therefore, it is also known as a summary budget. The Institute of Cost Management Accountants, England, has defined it as "the summary budget, incorporating its component functional budgets, which is finally approved, adopted and employed." Thus, the master budget is a summarised form of all the budgets of a firm. This budget requires the approval of the Budget Committee before it is put into operation.
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Question 102 Marks
Distinguish between Production Budget and Material Budget.
Answer
S.No.Basis of DistinctionProduction BudgetMaterial Budget
1.PurposeTo decide what is to be pro-duced, when, how much and where.Wide scope contains estimates of all production activities.
2.ContentsWide scope contains estimates of all production activities.Narrow scope contains esti-mates of only materials
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Question 112 Marks
Distinguish between Production Budget and Sales Budget.
Answer
(i) Production budget contains an estimate of the total volume of output whereas sales budget contains an estimate of the total sales volume.
(ii) Production budget consists of materials budget, direct labour budget and factory overheads budget. On the other hand, sales budget consists of advertising budget, selling expenses budget and selling and distribution overheads budget.
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Question 122 Marks
Distinguish between Cash budget and Cash flow statement.
Answer
(i) A cash budget is a scientific estimate of cash receipts and cash payments during a specific time period in future. On the other hand, a cash flow statement is a statement of cash receipts and cash payments during a specific time period in the past.
(ii) A cash budget contains estimates while a cash flow statement contains actual amounts.
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Question 142 Marks
State any two factors to be kept in mind while preparing the sales budget of an organisation.
Answer
SELF
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[2 Mark Question Answer] - Commercial Studies STD 10 Questions - Vidyadip