A timetable detailing projected cash receipts and disbursements is classified as __________?
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Answer: B. cash budget
Explanation
A cash budget provides a detailed timetable of projected cash receipts and disbursements. It helps organizations foresee cash surpluses or potential funding deficits over specific future periods. Managing this schedule prevents liquidity crises and optimizes short-term borrowing. The cash budget is a vital component of the master budget, synthesizing cash inflows from sales and outflows from expenses. It typically includes schedules for collections from customers and payments for suppliers and payroll. Timing differences between revenue recognition and cash collection make this budget essential.
Treasury managers rely on cash budgets to maintain adequate operating liquidity and plan short-term investments. It is critical for keeping businesses solvent during seasonal sales fluctuations. Options A, C, and D use vague or incorrect phrasing that does not represent standard financial budgeting nomenclature.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
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