Principles of Cash Budgeting

Loan from a bank is a fixed amount borrowed for an agreed period on prearranged terms

• True

• False

Depreciation of non current asset affects profit only

• True

• False

Repayment of a loan would adversely affect both company's cash flow and profit

• True

• False

Tax charge would adversely affect both company's cash flow and its profit

• True

• False

The part of the purchase price of the asset is satisfied by transferring ownership of another asset to the seller

• Hire Purchase

• Loan

• Part exchange

• Overdraft

Working capital is

• Inventory days+ Receivable days-Payable days

• Inventory days-Receivable days+ Payable days

• Inventory days-Receivable days-Payable days

A cash budget is an estimate of all the

• Cash inflows

• cash outflows

• cash inflows and cash outflows

Expenses incurred in current accounting period but has not been paid are called

• Prepayments

• Accruals

• Costs

• Financial Transaction

Liquid asset include

• Noncurrent asset and cash

• Cash ,Inventory, trade receivables

• Trade payables and loan

• Cash and Inventory

Working capital is difference between a company's current assets and its liabilities

• True

• False