Kliting Co. is concerned with whether or not it will be able to pay its bills with money coming in from sales. It would be helpful for Kliting to prepare a ____ to better understand its needs.
A) capital budget
B) zero-based budget
C) cash budget
D) loan application
E) revolving credit agreement

Question

Quizplus · Accepted Answer

A cash budget is a financial statement that estimates the cash inflows and outflows of an organization for a specific period. It would provide Kliting Co. with a better understanding of its ability to pay its bills with incoming cash from sales. A capital budget deals with long-term investments, a zero-based budget requires each expense to be justified anew for each period, and a loan application or revolving credit agreement are financing options that do not provide insight into cash inflows and outflows.