A company is preparing its cash budget. Its cash balance on January 1 is $290,000, and it has a minimum cash requirement of $340,000. The following data have been provided:
-Which of the following would not be used in preparing a cash budget for October?
A)beginning cash balance on October 1
B)budgeted salaries expense for October
C)estimated depreciation expense for October
D)budgeted sales and collections for October

Question

A company is preparing its cash budget. Its cash balance on January 1 is $290,000, and it has a minimum cash requirement of $340,000. The following data have been provided:  ​
-Which of the following would not be used in preparing a cash budget for October?
A)beginning cash balance on October 1 
B)budgeted salaries expense for October 
C)estimated depreciation expense for October 
D)budgeted sales and collections for October

Quizplus · Accepted Answer

Depreciation expense is a non-cash expense and therefore would not be used in preparing a cash budget. Cash budgets focus on cash inflows and outflows, and depreciation does not affect cash.

A Company Is Preparing Its Cash Budget