The key input to any cash budget is
A) the pro forma balance sheet.
B) the current tax laws.
C) the production plan.
D) the sales forecast.

Question

Quizplus · Accepted Answer

The key input to any cash budget is the sales forecast because it provides an estimate of the amount of revenue that will be generated during the budget period. This information is necessary for determining the cash inflows into the business, which are critical for managing cash flow and ensuring that there is enough cash available to meet the business's financial obligations. While the production plan, current tax laws, and pro forma balance sheet are important inputs to the budgeting process, none of these factors are as critical to the cash budget as the sales forecast.

The Key Input to Any Cash Budget Is