Cash Budget Flashcards
1
Q
What is a cash budget?
A
Detailed budget of estimated cash inflows and outflows incorporating both revenue and capital.
2
Q
What does the cash budget show?
A
The cash effect of all budget plans
3
Q
Why is the cash budget an essential component of a business plan?
A
Liquidity and cash flow management are key factors in the successful operation of any organisation
4
Q
What is the timescale of a cash budget?
A
Daily, weekly, quarterly or monthly
5
Q
What is the overall aim of cash budgeting?
A
Manage a firm’s cash to attain
- maximum cash availability
- maximum interest
6
Q
What do cash receipts depend on collections from?
A
- Customers’ accounts
- Cash sales
- Other operating income sources.
