A cash budget is unnecessary since we know how much units will be sold and produced every month, which is assumed to be the cash inflows and outflows.

Question

Quizplus · Accepted Answer

Even if we know how many units will be sold and produced, there are still other cash inflows and outflows to consider, such as operating expenses, investment costs, and financing activities. Therefore, a cash budget is necessary to ensure proper management of cash flow and avoid any cash shortages or surpluses.

A Cash Budget Is Unnecessary Since We Know How Much