A cash budget is:
A) part of the bank reconciliation process.
B) used to facilitate minor cash disbursements.
C) a means of identifying future cash receipts and future cash payments.
D) all of the above.

Question

Quizplus · Accepted Answer

A cash budget is a financial planning tool that helps companies identify future cash receipts and payments. It is used to predict cash flow for a specific period, usually a month or a quarter. It can also assist organizations in managing their cash flow by identifying potential cash shortages and surpluses. It is not part of the bank reconciliation process, which is a separate accounting procedure, nor is it primarily used to facilitate minor cash disbursements.

A Cash Budget Is