A cash budget differs from an income statement because the cash budget
1) does not determine profits or losses
2) excludes depreciation expense
3) uses disbursements and not expenses

Question

​A cash budget differs from an income statement because the cash budget
1) does not determine profits or losses
2) excludes depreciation expense
3) uses disbursements and not expenses

Quizplus · Accepted Answer

A cash budget is a projection of cash inflows and outflows for a specific period of time, typically a month or year. It focuses on cash transactions rather than non-cash items such as depreciation, which is included in the income statement. The cash budget does not determine profits or losses; it simply tracks cash flow. Therefore, option 1 is correct. The cash budget uses disbursements, which are cash outflows, instead of expenses, which may include non-cash items. Therefore, option 3 is also correct. Option 2 is incorrect because it is not relevant to the difference between a cash budget and an income statement.

​A Cash Budget Differs from an Income Statement Because the Cash

A Cash Budget Differs from an Income Statement Because the Cash