Paper 2 · cash budgeting
In accounting, a master budget is best described as:
Aa single budget prepared for just one department or function of a business, ignoring the rest of the organisation entirely.
Ba comprehensive summary budget combining all functional budgets into one budgeted income statement, statement of financial position and cash budget.
Ca forecast of cash receipts and payments only, prepared purely to show the expected bank balance at the end of each month.
Da report comparing actual financial results against the budgeted figures, produced only after the financial period has already ended.
Explanation: A master budget is the overall summary budget of an organisation. It is built up by consolidating all the individual functional budgets (sales, production, cash, etc.) into three end products: a budgeted income statement, a budgeted statement of financial position and a cash budget. A budget covering only one department is a functional budget; a forecast of receipts and payments only is a cash budget on its own; comparing actual against budget after the period has ended is budgetary control, not the master budget itself.
Derived from ZIMSEC Accounting Paper 2, specimen 2026, Q1
