Which of the Following Statements Concerning the Cash Budget Is

question 113

Multiple Choice

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

• A) Depreciation expense is not explicitly included, but depreciation's effects are reflected in the estimated tax payments.
• B) Cash budgets do not include financial items such as interest and dividend payments.
• C) Cash budgets do not include cash inflows from long-term sources such as the issuance of bonds.
• D) Changes that affect the DSO do not affect the cash budget.

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Definitions:

Spontaneously Generated Funds

Internal funds generated by a company's operations without the need for external financing.

Retained Earnings

The portion of net income not distributed to shareholders but reinvested in the business or kept as reserve.

Operational Funds

Money that is available for daily business activities, including salaries and maintenance, ensuring smooth operations.

Full Capacity Sales

Full capacity sales refer to the maximum sales level that a company can attain with its current production capacity and resources, without additional investment.