organizations (firms, universities, government agencies), spending appears to increase as the end of the budgeting period approaches, even if there are no seasonal differences. What might cause this? (A). "Our cash budget shows a surplus for the quarter, so we do not have to think about arranging any bank financing." Comment on this statement. (B). Accrual accounting is preferable to cash flow accounting because the information is more relevant to all users of financial statements. Discus

organizations (firms, universities, government agencies), spending appears to increase as the end of the budgeting period approaches, even if there are no seasonal differences. What might cause this? (A). "Our cash budget shows a surplus for the quarter, so we do not have to think about arranging any bank financing." Comment on this statement. (B). Accrual accounting is preferable to cash flow accounting because the information is more relevant to all users of financial statements. Discus

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 8TP: If management is being evaluated on their ability to manage a budget, what can they do to increase...

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Similar questions

we recognize that cash and profits are different and, by extension, a cash budget, though similar, is different than an income statement in many ways. Write a essay to explain the purpose of a cash budget and an income statement, and compare and contrast both financial statements. You may supplement your response with research from outside sources.
A cash flow budget can be used to A. estimate when and how much money will need to be borrowed during the year B. estimate when and how much debt can be repaid during the year C. estimate when excess cash may be available so plans can be made to invest it D. all of the above
It’s a general saying that Companies having proper management of “Future Cash Budgeting” are enjoying more financial soundness. If yes, justify with examples?
Which statement about the cash budget is correct? It is also called the statement of cash flows. It can show managers when the company will experience a net loss. It can indicate when sales are insufficient. It can show managers when additional financing will be necessary.
explain to me how would a cash budget relate to the breakeven analysis. What would a banker or investor look for in these documents.
A very important role of the cash budget is to a. Determine how to finance dividend payments b. Plan for appropriate financing needs c. Determine the optimal source of financing for the organization’s operations d. Help identify credit customers who might not pay
BY providing appropriate examples, explain the main advantages of identifying cash surpluses and deficits in a cash budget.?
If management is being evaluated on their ability to manage a budget, what can they do to decrease cash outflow?
If management is being evaluated on their ability to manage a budget, what can they do to increase cash flow?
Which of the following statements is most correct? a. A cash management system that maximizes collections float while minimizing disbursement float is preferable to one that has lower collections float while increasing disbursement float. b. Other things held constant, a firm will need a smaller line of credit if it can arrange to pay its bills by the 5th of each month than if its bills come due uniformly during the month. c. None of the statements are correct. d. The use of a lockbox is intended to reduce cash theft losses. In the event that if the cost of the lockbox is less than the theft losses avoided, the lockbox should be installed. e. A cash management system that minimizes collections float while increasing disbursement float outperforms one with higher collections float but lower disbursement float.
A very important role of the cash budget is to Determine how to finance dividend payments Plan for appropriate financing needs Determine the optimal source of financing for the organization’s operations Help identify credit customers who might not pay
Define the cash conversion cycle (CCC) and explain why, holding other things constant, a firm’s profitability would increase if it lowered its CCC. What is a cash budget, and how can this statement be used to help reduce the amount of cash that a firm needs to carry? What are the advantages and disadvantages of daily over monthly cash budgets, and how might a cash budget be used when a firm is negotiating a loan from its bank? What are the four key factors in a firm’s credit policy? How would a relaxed policy differ from a restrictive policy? Give examples of how the four factors might differ between the two policies. How would the relaxed versus the restrictive policy affect sales? Profits?