Question

Name the type of budget which is prepared to determine the net cash position.

Answer 1

(a) Purchase budget

(b) Sales budget

(c) Cash budget

(d) Production budget

Answer (c) Cash budget

Explanation: A cash budget is an assessment of the incomes of a business throughout a particular time frame. This could be for a weekly, monthly, quarterly, or yearly spending plan. The financial plan gives an organisation knowledge of its money needs (and any excess) and assists with deciding an effective distribution of money.