When forecasting cash disbursements in the cash budget:

Question

Quizplus · Accepted Answer

Cash disbursements should be recorded in the month they will be paid, as this represents the outflow of cash from the company. This will also give a more accurate representation of the company's cash position and allow for better cash flow management. Options A and D are incorrect as cash receipts refer to incoming cash, while using funds for other purposes before disbursement would result in inaccurate cash forecasting. Option C may be relevant for accrual accounting, but not for forecasting cash disbursements in a cash budget.

When Forecasting Cash Disbursements in the Cash Budget