Answered: The "Cash Budget" a)is used 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

The "Cash Budget"

a)is used to predict future surpluses & shortages of cash, allowing the organization to plan ahead for such occurrences

b)differs from the Master Budget due to the accrual concept

c)uses the Master & Capital budgets for input

d)all of the listed answers are correct

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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