Which of the following statements regarding cash flows is true?
A) Many managers consider cash flow budgets to be the least important of all the budgets.
B) As long as accounting revenues exceed accounting expenses, cash flow budgets do not have to be prepared.
C) It is possible for cash receipts to exceed revenues earned in a given month.
D) As long as a manager is confident that there will eventually be a cash receipt from a customer, the timing of the cash receipt is not important.

Question

Quizplus · Accepted Answer

It is possible for cash receipts to exceed revenues earned in a given month. This can happen if customers pay in advance or if the company receives other types of income such as interest or dividends. It is important for managers to track and understand their cash flows, even if accounting revenues exceed expenses, to ensure the company has enough cash on hand to meet its obligations.

Which of the Following Statements Regarding Cash Flows Is True