Big Bear Ski Lodge's cash budget for the month of March,2011,shows a negative amount.Due to the fact that the months of January and February were quite lucrative and showed positive amounts,the finance manager will not borrow any money on the short-term to cover for March's deficit.

Question

Quizplus · Accepted Answer

The fact that January and February were profitable does not necessarily mean that the company has enough cash reserves to cover a negative cash balance in March. The finance manager may still need to borrow money to ensure the company can meet its financial obligations in March.

Big Bear Ski Lodge's Cash Budget for the Month of March,2011,shows