As a finance manager at AllSports Communication, Charlie worries about the firm's borrowing requirements for the upcoming year. He knows the benefit of estimating AllSports' cash disbursements and short-term investment expectations. Facing these concerns, a(n) ________ would provide Charlie with valuable information by providing a good estimation of whether the firm will need to do short-term borrowing
A) operating budget
B) cash budget
C) capital budget
D) line item budget

Question

Quizplus · Accepted Answer

A cash budget focuses specifically on estimated cash inflows and outflows for a specific period, making it the most relevant option for Charlie to estimate whether short-term borrowing will be necessary. An operating budget typically focuses on revenue and expense projections, but may not provide as detailed information on cash flow. A capital budget focuses on longer-term investments in fixed assets, while a line item budget may provide information on individual expenses but may not give an overall picture of cash flow.

As a Finance Manager at AllSports Communication, Charlie Worries About