BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The cash forecast of the firm by planning inflows and outflows.
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Depreciation is excluded from the statement.
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Used to estimate short term cash requirements.
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Positive cashflow indicate the firm has surplus cash.
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Detailed explanation-1: -Which of the following describes the cash budget? It helps in planning to ensure the business has adequate cash. Which of the following describes the selling and administrative expenses budget? It captures the variable and fixed components of selling and administrative expenses of the business.
Detailed explanation-2: -The statement which is true about cash budget is that only actual payment and receipts are shown from other operating budget schedule, the cash receipts are scheduled based on cash sales made as well as the credit sales thus predict the cash flows projection of an organization as per the cash budget concept.
Detailed explanation-3: -Positive cash flow means a company has more money moving into it than out of it. Negative cash flow indicates a company has more money moving out of it than into it.
Detailed explanation-4: -Cash inflows and cash outflows are used to calculate the budget. Operating expenses are a part of the total cash outflow. Setup cost is incurred for starting the business and hence is excluded in the budget calculations.