A cash budget will have value only if it is actually used and ____________.
A)records of actual income and expenses are kept
B)spending never deviates from the budgeted amount
C)it reflects actual financial position
D)it takes into account only credit transactions

Question

A cash budget will have value only if it is actually used and ____________. ​
A)records of actual income and expenses are kept
B)spending never deviates from the budgeted amount
C)it reflects actual financial position
D)it takes into account only credit transactions

Quizplus · Accepted Answer

A cash budget is a tool used to forecast and manage cash flows. To ensure its effectiveness, records of actual income and expenses must be kept and compared to the budgeted amounts. This helps identify any discrepancies and adjust the budget accordingly. Simply creating a budget without tracking actual results would not provide any value in effectively managing cash flows. Spending deviation from the budgeted amount and credit transactions are not directly related to the use and value of a cash budget.

A Cash Budget Will Have Value Only If It Is