Which item should a company report directly in its monthly cash budget?
A)its monthly depreciation expense
B)cash proceeds from selling one of its divisions
C)accrued interest on zero coupon bonds that it issued
D)new shares issued in a stock split

Question

Quizplus · Accepted Answer

Cash proceeds from selling one of its divisions should be reported directly in a monthly cash budget as it represents a significant inflow of cash that will impact the company's cash balance for the month. Depreciation expense represents a non-cash expense and will not impact the company's cash balance in the short term. Accrued interest on a bond is a non-cash expense that will not impact the company's cash balance until interest is actually paid, which may not happen in the same month. New shares issued in a stock split represent a change in the company's ownership structure and do not impact the company's cash balance.

Which Item Should a Company Report Directly in Its Monthly