Which of the following cash budget equations is incorrect?
A) Cash payments + cash receipts = cash requirements
B) Beginning cash + cash receipts = total cash available
C) Cash payments + cash cushion = total cash needed
D) Period one ending cash balance = period two beginning cash balance

Question

Quizplus · Accepted Answer

The correct equation should be "Cash payments + cash requirements = cash receipts" or "Cash receipts - cash payments = cash requirements." The given equation in option A is incorrect as it does not properly balance the cash flow components.

Which of the Following Cash Budget Equations Is Incorrect