For a cash budget to enable close monitoring of the entity's cash position it should be prepared on a:
A) yearly basis.
B) daily basis.
C) monthly basis.
D) quarterly basis.

Question

Quizplus · Accepted Answer

A cash budget should be prepared on a monthly basis as it allows for more accurate monitoring of the entity's cash position. Daily would be too frequent and may not provide enough information, while quarterly or yearly may not be frequent enough and could lead to missed opportunities or potential cash flow issues. Monthly also allows for adjustments to be made if there are any unexpected changes in the entity's operating environment.

For a Cash Budget to Enable Close Monitoring of the Entity's