In preparing a cash budget, from an accounting record-keeping perspective there is no need to adjust the balance of accounts receivable and reported income to reflect the uncollectible debt.

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When preparing a cash budget, it is necessary to adjust the balance of accounts receivable and reported income to reflect any uncollectible debts, as this will impact the cash inflows for the period. Failure to make this adjustment could result in an overstated cash inflow projection, leading to inaccurate cash management decisions.

In Preparing a Cash Budget, from an Accounting Record-Keeping Perspective