The cash budget is prepared for managers to:

Question

Quizplus · Accepted Answer

The cash budget is prepared to identify short-term cash inflows and outflows. This helps managers to determine if there will be sufficient cash available to meet the company's obligations like paying bills, payroll, and other expenses that arise. Matching expenses with revenue on an accrual accounting basis and discovering if the plans of the firm will create a positive or negative profit are important, but they are not the primary purpose of the cash budget.

The Cash Budget Is Prepared for Managers To