The cash budget is prepared before the budgeted balance sheet is prepared.

Question

Quizplus · Accepted Answer

The cash budget is a part of the operating budget and is typically prepared before the budgeted balance sheet, which is a part of the financial budget. The purpose of the cash budget is to estimate the cash inflows and outflows for a particular period, usually a month or a year, and to determine whether the company will have sufficient cash to meet its obligations. The budgeted balance sheet, on the other hand, estimates the company's financial position at the end of the budget period by projecting the assets, liabilities, and equity based on the operating budget and other assumptions.

The Cash Budget Is Prepared Before the Budgeted Balance Sheet