Answer (D) is correct . The starting point for the annual budget is the sales forecast. All other aspects of the budget, including production, costs, and inventory levels, rely on projected sales figures.
Answer (A) is incorrect because A financial budget cannot be prepared until after the sales budget has been completed.
Answer (B) is incorrect because A balance sheet cannot be prepared until after the sales budget has been completed.
Answer (C) is incorrect because An income statement cannot be prepared until after the sales budget has been completed.
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