S2 Cash Budgets

The money you start with is called the

• Budget

• Opening Balance

• Cash

• Closing Balance

A loan is included in which section of the cash budget?

• The back of your wallet

• Receipts

• Payments

• Opening Balance

Machinery purchases are put in which section?

• Closing Balance

• Opening Balance

• Receipts

• Payments

The formula for calculating the closing balance is

• SUM

• Opening balance - payments

• Receipts - payments

• Opening balance + receipts - payments

The purpose of a cash budget is

• to forecast when there will be surplus cash

• to forecast when there will be a deficit

• to have something fun to do

• to use your calculator

What is a deficit?

• When you haven't completed a cash budget

• When you can see that you will have extra money this month

• When you forecast that you will have extra money to spend

• When you forecast that you will be short of money

How can you make sure you will not have a deficit?

• Reduce the amount of money spent

• Ask the bank for a loan

• Change the numbers in the budget so they give positive totals

• Option 1 and 2

What could a business do with a surplus?

• Borrow more money

• Reduce their spending

• Buy equipment

• Pay for advertising