ECONOMICS

COST ACCOUNTING

THE MASTER BUDGET

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A business may prepare for a cash deficit by:
A
reducing planned profits
B
reducing planned cash payments
C
reducing capital contributions
D
increasing loan payments
Explanation: 

Detailed explanation-1: -Consider Borrowing Options Cash flow shortages occur when more money flows out of your company than into your company. One way to solve the problem is to find a way to bring money into the business. You can do this with a business loan or a credit card advance.

Detailed explanation-2: -Cash Deficit is a term used in accounting that means there is a difference between the estimated closing cash and the actual closing cash. In this scenario the estimated cash is greater than the actual closing cash.

Detailed explanation-3: -Cutting spending will help you to prevent or eliminate the deficit. If you limit your spending for the remaining quarters, you may make up or avoid a deficit with the revenue you bring in. Begin by eliminating the unnecessary spending in your organization.

There is 1 question to complete.