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What is master budget?

The master budget is a summary of all functional budgets. It is a summary budget incorporating its component functional budgets and which is finally approved, adopted, and employed. A master budget shows the operating profit of the business for the budget period and the statement of financial position as it closes.

The master budget include the budgeted statement of profit and loss, the budgeted statement of financial position, and budgeted statement of cash flow.

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