5. Budget Preparation Flashcards
1
Q
What does the master budget consist of?
A
The SPF, P&L and Cash Flow Statement
2
Q
What is the first step in the budget preparation process?
A
Identifying the principle budget factor
3
Q
What is the principle budget factor?
A
The factor which limits what an organisation can achieve (most often sales)
4
Q
What is a cash budget?
A
A detailed budget of estimated cash inflows and outflows incorporating both revenue and capital expenditure
5
Q
What actions might you take if a future cash shortage is identified?
A
- Organise an overdraft
- Offer customers discounts for paying early
- Delay paying suppliers
- Raise other finance
