Answered: How were the figures under "payment to…

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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Question

How were the figures under "payment to suppliers" in the cash budget calculated? Also for sales receipts you have $30,800 in september when it should be $25,200?

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.

Expert Solution

Step 1

Budgeting is a process of estimation of cash balance for specified future period. On the basis of this estimation business can arrange required money .