The following extracts from the DEF Co budget are available. Year ended 30 June 2019 Sales $1,135,600 Purchases 751,700 Closing inventory 113,500 Opening inventory 112,250 Opening receivables 163,525 Opening payables 113,550 DEF Co expects that receivables will increase by 12% and that payables will increase by 15% by the end of the year.

Q: What is the purpose of a budget in financial management?

A: Financial management refers to the process of planning, organizing, directing, and controlling the…

Q: In budgeting cash, cash disbursements include payments to employees and suppliers as well as for…

A: CASH BUDGET Cash Budget is a detailed budget of cash income and cash expenditure incorporating both…

Q: Depreciation expense is included on the following budgets: A. Cash budget B. Income statement…

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Q: What is the major benefit of tying a budget to the overall goals of the compan

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Q: What is a cash budget, and how is this statementused by a business? How is the cash budget affected…

A:

Q: Which one of the following will appear in the cash budget but not in the budgeted statement of…

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A:

Q: Explain the term of operating budget.

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Q: What skills and knowledge would be used to construct a cash budget

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Q: When is a cash flow budget a useful alternative to a comprehensive budget?

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Q: What are the benefits of tying a budget to the overall goals of the company?

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A: budget state when expenditure is less than revenue is surplus.

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Cash budget

A cash budget is an estimate of an organization's cash flow for the 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. If cash receipts are insufficient to cover future expenses, an organization may plan to obtain funds from other sources. After estimating the sales, purchase, and capital expenditure budgets for the year, management develops a cash budget. These budgets are created to ensure that an organization's cash flow is managed. It is important to note that only cash transactions are recorded when actual cash enters and exits an organization.