Which of the Following Statements Concerning the Cash Budget Is

question 68

Multiple Choice

Which of the following statements concerning the cash budget is CORRECT?

• A) Cash budgets do not include financial items such as interest and dividend payments.
• B) Cash budgets do not include cash inflows from long-term sources such as the issuance of bonds.
• C) Changes that affect the DSO do not affect the cash budget.
• D) Capital budgeting decisions have no effect on the cash budget until projects go into operation and start producing revenues.
• E) Depreciation expense is not explicitly included, but depreciation's effects are reflected in the estimated tax payments.

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Definitions:

Assets Increase

A rise in the company's resources, resulting from transactions that bring future economic benefits to the entity.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its operational, investing, and financing activities.

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and other investments not considered cash equivalents.

Financing Activities

Transactions related to raising capital or repaying investors, reflecting how a company funds its operations and growth.