The purpose of the cash budget is to:
A)be used as a basis for the operating budgets.
B)provide external users with an estimate of future cash flows.
C)help managers plan ahead to make certain they will have enough cash on hand to meet their operating needs.
D)summarize the cash flowing into and out of the business during the past period.

Question

Quizplus · Accepted Answer

The cash budget is designed to help managers plan for the future and ensure that they have enough cash on hand to meet their operating needs. This budget estimates the cash inflows and outflows over a specific period of time and identifies potential cash shortfalls or surpluses. Additionally, while the cash budget may be used as a basis for the operating budgets, it is not typically provided to external users to estimate future cash flows, nor does it summarize cash flows from the past period.

The Purpose of the Cash Budget Is To