Answered: BamBam runs a small business. At the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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BamBam runs a small business. At the start of June she has £11737 in the bank. Revenue Bambam allows her customers one month credit period and they usually take it. Sales for the quarter are below: May £4975 June £4087 July £4842 Payments Bambam has a great relationship with suppliers has two months credit period. Payments for the quarter are below: April £1998 May £2802 June £2090 Using a cash budget what will the cash closing balance be for June.

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Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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