A cash budget summarizes the cash flows into and out of a firm over a period of time.

Question

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A cash budget is a tool used to track cash inflows and outflows of a firm over a specific period of time, usually a month or a quarter. The purpose of a cash budget is to ensure that a business has enough cash on hand to cover its expenses and debts. It helps in identifying potential cash shortages and surpluses that can guide financial decisions. Therefore, the statement is true.

A Cash Budget Summarizes the Cash Flows into and Out