ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cash receipts
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Cash excess or deficiency
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Financing-Borrowing/Repayment
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All of the above are a part of the Cash budget
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Detailed explanation-1: -b) Cash budget does not include depreciation and credit sales.
Detailed explanation-2: -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. So Option C is the right answer.
Detailed explanation-3: -The cash budget represents a detailed plan of future cash flows and is composed of four elements: cash receipts, cash disbursements, net change in cash for the period, and new financing needed.
Detailed explanation-4: -Answer and Explanation: Correct Answer: Option (d) Cash budgets include personal cash receipts and expenses is the correct answer because the cash budget includes business cash receipts and expenses and not the personal cash receipts and expenses.