Select the Incorrect Statement Regarding the Cash Budget

question 106

Multiple Choice

Select the incorrect statement regarding the cash budget.

• A) The cash budget helps managers to anticipate cash shortages and excess cash balances.
• B) Cash inflows and outflows indicated on the cash budget are reported on a company's pro forma statement of cash flows.
• C) Cash payments may include outflows for inventory, selling and administrative expenses, and equipment purchases.
• D) The total cash available is calculated by adding cash receipts and the ending cash balance.

---

Definitions:

Financial Statement Accounts

Accounts that appear on the financial statements, including assets, liabilities, equity, revenues, and expenses.

Lower of Cost

A principle stating that inventory must be recorded at either its historical cost or market value, whichever is lower.

Market Valuation

The process of determining the current value of a company or an asset in the marketplace.