5. In her preliminary cash budget, Johnson hasassumed that all sales are collected and thusthat RR has no bad debts. Is this realistic? Ifnot, how would bad debts be dealt with in acash budgeting sense? (Hint: Bad debts willaffect collections but not purchases.)
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
5. In her preliminary
assumed that all sales are collected and thus
that RR has no
not, how would bad debts be dealt with in a
cash budgeting sense? (Hint: Bad debts will
affect collections but not purchases.)
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