ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following statements is NOT correct concerning the Cash Budget?
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It is not necessary to prepare any other budgets before preparing the Cash Budget.
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The Cash Budget should be prepared before the Budgeted Income Statement
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The Cash Budget should be prepared before the Budgeted Balance Sheet.
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The Cash Budget builds on earlier budgets and schedules as well as additional data.
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Explanation:
Detailed explanation-1: -Option (a) A cash budget sets out all cash receipts and payments that a business expects to make over a period of time is not the correct answer because it is true about the cash budget.
Detailed explanation-2: -Correct answer is: Option a) The cash budget summarizes all cash receipts and disbursements during the budget period.
Detailed explanation-3: -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.
There is 1 question to complete.