ECONOMICS

Detailed explanation-1: -Cash is shown on the asset side of the balance sheet. Thus budgeted balance sheet is not required while preparing a cash budget. Hence, this option is corect.

Detailed explanation-2: -Cash Budget Explained Cash receipts include receipts from the sale of goods & services, interest, etc. and cash payments include payment against the purchase of goods & services, salaries, electricity, loans, etc. In other words, the budget is prepared to make estimations of the company’s cash position in the future.

Detailed explanation-3: -When preparing the cash budget, all the following should be considered except: Depreciation expense. A plan that shows the expected cash inflows and cash outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans, is called a(n): Cash budget.

Detailed explanation-4: -Always remember that the sales budget is prepared first before any budget is created. Accordingly, after the sales budget, the production and cash budget then follows.