Question

List the five internal factors that must be considered in preparing a cash budget

Answer 1

Answer:

cash receipt:

credit to customer

sales of asset

credit payment:

credit to supplier

purchase asset

expenses paid

Explanation:

income and gain should be posted in credit receipt

expenses and loss should be posted in credit payment

Answer 2

Internal factors to be considered in preparing a cash budget:

The cash budget typically consists of three major sections (10 factors):  

• Cash Balance

• Expected Cash Expenses

• Other Direct expenses.

In cash balance:

Things such as the following occur:

• Expected Cash receipts

• Cash sales  

• Collection of accounts receivable  

• Other incomes.

In Expected cash expenses:  

Things such as the following occur:

• Raw material

• Pay roll

In other direct expenses:

Things such as the following occur:

• Advertising - Selling expenses

• Admin Expenses

• Plant and equipment

• Other payments.

These are the most important factors to be evaluated and considered before preparing a cash budget as these may affect the firms total master budget and may mislead while making a future budget plan