The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than
A) the prior years.
B) management's minimum required balance.
C) the amount needed to avoid a service charge at the bank.
D) the industry average.

Question

Quizplus · Accepted Answer

The financing section of a cash budget is used if there is a cash deficiency, meaning the ending cash balance is less than what management requires as a minimum balance. Therefore, choice B is the correct answer. The other options do not relate to the purpose of the financing section in a cash budget.

The Financing Section of a Cash Budget Is Needed If