The cash budget approach to financial forecasting assumes that balance sheet accounts maintain a constant relationship to cash.

Question

Quizplus · Accepted Answer

The cash budget approach focuses solely on the inflows and outflows of cash and does not take into account the relationship between cash and balance sheet accounts. Therefore, the assumption that balance sheet accounts maintain a constant relationship to cash is not a part of the cash budget approach.

The Cash Budget Approach to Financial Forecasting Assumes That Balance