Question

14. Which of the following is not true for cash Budget.
(A) Only revenue nature cash flows are shown
(B) Proposed issue of share capital in shown as an inflow
(C) All inflows would arise before outflows for those periods.
(D) That shortage or excess of cash would appear in a particular period.​

Answer 1

Answer:

(b)

Explanation:

Cash budget is prepared to identify the expected cash receipts and cash payments for given a period. This includes all item of receipts and payment i.e. revenue and capital both.

Cash budget is based on the cash concept, hence all the cash receipts and payments are considered irrespective of the period. Cash budget does not have any linkage with accrual concept.

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