Differentiate between an operating budget and a financial budget.

A. An operating budget is used to control the receipt and disbursement of funds and it focuses on the statement of cash receipts and disbursements. A financial budget is used as a guide for production and sales and it focuses on the income statement.

B. An operating budget is used as a guide for production and sales and it focuses on the income statement. A financial budget is used to control the receipt and disbursement of funds and it focuses on the statement of cash receipts and disbursements.

C. An operating budget focuses on the budgeted cost for various functions over a specific time period. A financial budget focuses on the budgeted cost of activities required to produce and sell products and services.

D. An operating budget focuses on the budgeted cost of activities required to produce and sell products and services. A financial budget focuses on the budgeted cost for various functions over a specific time period.