All the items of revenue and expense must be considered by management in preparing an operational budget.Select one:TrueFalse

Answer

True

Explanation

In preparing an operational budget, management must consider all items of revenue and expense to ensure a comprehensive financial plan. This includes anticipating all sources of revenue—such as sales, service income, and any other income-generating activities—alongside all expenses, which encompass fixed costs (like rent and salaries) and variable costs (like supplies and utilities). By considering every item, management can create a more accurate budget that reflects the overall financial health of the organization, allowing for better decision-making and resource allocation. Ignoring any items could lead to budget shortfalls or misallocation of resources, ultimately affecting the business's operational effectiveness and financial viability.