Which of the following statements concerning budget preparation is correct for a merchandiser? Operating expenses differ from operating cash outflows only as a result of timing differences between when the expense is incurred and when an expense is paid. Beginning inventory amounts for each period are always equal to the prior month's ending inventory multiplied by a given percentage. Understanding cost function is irrelevant in the preparation of an operating expense budget. Assuming a portion of the company's sales are made on account, bad debt expense under the percentage of sales method is calculated by multiplying credit sales by the estimated uncollectible percentage. Depreciation expense is always paid in the period in which is it incurred for purposes of the cash disbursements budget