A cash budget allows a small business owner to anticipate cash shortages and cash surpluses and gives him time to handle, or even avoid, approaching problems.

Question

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A cash budget is an important tool for small business owners to manage their cash flow. By forecasting their expected cash inflows and outflows over a given period of time, they can identify potential cash shortages or surpluses and take action to address them before they become a problem. This can help them avoid costly penalties for late payments or missed opportunities to invest surplus cash. Therefore, it is true that a cash budget allows a small business owner to anticipate cash shortages and cash surpluses and gives him time to handle, or even avoid, approaching problems.

A Cash Budget Allows a Small Business Owner to Anticipate