The cash budget is a schedule of expected cash receipts and disbursements that:

Question

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The cash budget predicts the effect on the cash position at given levels of operations, taking into account expected cash receipts and disbursements. It is usually prepared after the sales forecast and may require an ageing of accounts receivable and accounts payable to estimate timing of cash inflows and outflows respectively. However, it is not necessarily a self-liquidating cycle as it depends on the nature and timing of the transactions involved.

The Cash Budget Is a Schedule of Expected Cash Receipts