Which of the following is a characteristic of cash flow budget?
A) It allocates expenses for achieving the sales target.
B) It tells whether arrangements need to be made for borrowing or owner investments.
C) It contains a forecast of the amounts and sources of sales income and the materials that will be needed to achieve the sales forecast.
D) It plans and controls revenue in order to obtain desired profits.

Question

Quizplus · Accepted Answer

A cash flow budget focuses on tracking and projecting the cash inflows and outflows of a business, and helps to determine whether additional funding will be needed through borrowing or investments from owners. While a sales budget may include information about sales targets and materials needed, the primary focus of a cash flow budget is on cash management. Planning and controlling revenue to achieve desired profits is more closely associated with a profit budget.

Which of the Following Is a Characteristic of Cash Flow