Discussion
A budget that gives a summary of all the functional budgets and a projected profit and loss account is known as ..........
Answer: A
It is known as the Master Budget.
The master budget is the final, summary budget of an organisation. It brings together all the functional budgets, such as sales, production, materials, labour, overheads and cash, and presents a budgeted (projected) profit and loss account and a budgeted balance sheet for the period. It is approved by top management as the overall plan.
A capital budget deals only with long-term investment in fixed assets. A flexible budget shows costs at different levels of activity, and a fixed budget is prepared for one level of activity only; both describe how a budget behaves with activity, not a summary of all the functional budgets.
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