Scribd Logo
Upload

Welcome to Scribd!

  • 39 views

    Cash Budget: Financial Planning & Budgeting

    Uploaded by

    5555-899341
    The cash budget document outlines the four major sections of a cash budget: receipts, disbursements, cash excess/deficiency, and financing. The receipts section lists expected cash inflows from sales. The disbursements section lists planned cash payments for materials, labor, overhead, and other expenses. The cash excess/deficiency section computes beginning cash balance plus receipts minus disbursements to determine if there is excess cash that can be invested or a deficiency requiring financing. The financing section addresses borrowing needs if there is a cash deficiency.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Cash Budget: Financial Planning & Budgeting

    Uploaded by

    5555-899341
    39 views5 pages
    The cash budget document outlines the four major sections of a cash budget: receipts, disbursements, cash excess/deficiency, and financing. The receipts section lists expected cash inflows from sales. The disbursements section lists planned cash payments for materials, labor, overhead, and other expenses. The cash excess/deficiency section computes beginning cash balance plus receipts minus disbursements to determine if there is excess cash that can be invested or a deficiency requiring financing. The financing section addresses borrowing needs if there is a cash deficiency.

    Original Description:

    Cash Budget

    Original Title

    Cash Budget

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The cash budget document outlines the four major sections of a cash budget: receipts, disbursements, cash excess/deficiency, and financing. The receipts section lists expected cash inflows from sales. The disbursements section lists planned cash payments for materials, labor, overhead, and other expenses. The cash excess/deficiency section computes beginning cash balance plus receipts minus disbursements to determine if there is excess cash that can be invested or a deficiency requiring financing. The financing section addresses borrowing needs if there is a cash deficiency.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    39 views5 pages

    Cash Budget: Financial Planning & Budgeting

    Uploaded by

    5555-899341
    The cash budget document outlines the four major sections of a cash budget: receipts, disbursements, cash excess/deficiency, and financing. The receipts section lists expected cash inflows from sales. The disbursements section lists planned cash payments for materials, labor, overhead, and other expenses. The cash excess/deficiency section computes beginning cash balance plus receipts minus disbursements to determine if there is excess cash that can be invested or a deficiency requiring financing. The financing section addresses borrowing needs if there is a cash deficiency.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    Cash Budget

    Financial Planning & Budgeting


    1

    The cash budget is composed of four major sections:

    ● ○ receipts section
    ○ disbursements section
    ● ○ cash excess or deficiency section
    ○ financing section

    The receipts section lists all of the cash inflows, except from financing,
    expected during the budget period. Generally, the major source of receipts is
    from sales. The disbursements section summarizes all cash payments that
    are planned for the budget period. These payments include raw materials
    purchases, direct labor payments, manufacturing overhead costs, and so on,
    as contained in their respective budgets. In addition, other cash
    disbursements such as equipment purchases and dividends are listed.
    2

    The cash excess or deficiency section is computed as


    follows:

    Beginning cash balance XXXX

    Add cash receipts XXXX

    Total cash available XXXX

    Less cash disbursements XXXX

    Excess (deficiency) of cash available over disbursements XXXX

    If a cash deficiency exists during any budget period or if there is a cash


    excess during any budget period that is less than the minimum required cash
    balance, the company will need to borrow money. On the other hand, if there is a
    cash excess during any budget period that is greater than the minimum required
    cash balance, the company can invest the excess funds or repay principal and
    interest to lenders.
    3

    Preparing a budgeted income statement

    The budgeted income statement is constructed using data from the


    sales budget, the ending finished goods inventory budget, the manufacturing
    overhead budget, the selling and administrative budget, and the cash budget.

    Preparing a budgeted balance sheet

    The budgeted balance sheet is constructed using data from virtually all
    other parts of the master budget.
    4

    Cost Behavior

    It defines how a cost works or changes as the amount of cost driver changes.

    Types of costs as to behavior:

    Ø Fixed Cost – in total: constant within the relevant range as activity output
    changes; per unit: changes as activity level changes

    Ø Variable Cost – in total: varies in direct proportion to changes in activity


    output; per unit: remains constant

    Ø Mixed Cost – has both fixed and variable components.

    You might also like