Hilliard Company Budgeted the Following Transactions for April Year 2

question 3

Multiple Choice

Hilliard Company budgeted the following transactions for April Year 2: The beginning cash balance was $50,000. The company desires to have a $25,000 ending cash balance. The surplus (or shortage) of cash before considering any financing activities (that is, borrowings or repayments) during in April would be:

• A) $40,000 surplus.
• B) $40,000 shortage.
• C) $20,000 surplus.
• D) There is no cash surplus or shortage.

---

Definitions:

Minimum Cash Balance

The lowest amount of cash a company aims to maintain on hand to meet immediate needs and navigate through unforeseen expenditures.

Expected Cash Disbursements

Amounts of cash a company anticipates paying out over a specified period, often related to its operating expenses and investments.

Budgeted Accounts Receivable

The projected amounts to be received by a company for goods or services offered on credit, as estimated during the budgeting process.

Budgeted Sales

The projected amount of sales, in units or dollars, expected for a specific period.