There are four steps to creating a cash budget: Determining an adequate minimum cash balance;Forecasting sales;Forecasting cash receipts;and Estimating the end-of-month cash balance.

Question

Quizplus · Accepted Answer

The correct steps for creating a cash budget typically include: 1) Estimating or forecasting cash receipts (inflows), 2) Forecasting cash disbursements (outflows), 3) Determining the net cash flow (inflows minus outflows), and 4) Estimating the beginning and ending cash balances. Forecasting sales is part of estimating cash receipts, but determining an adequate minimum cash balance is a separate financial planning activity, not a step in creating the cash budget itself.

There Are Four Steps to Creating a Cash Budget: Determining