Inventory systems and Budgets

Provision for bad debts adjustment is an item that will appear in a Cash Budget but not on the Projected Income Statement

• True

• False

Depreciation is an imputed expense and therefore does not appear in the Cash Budget?

• True

• False

What makes the Cash Budget and Projected Income Statement similar is that they both project figures for the future?

• True

• False

The main purpose of preparing a Cash Budget is to project future income and expenses?

• True

• False

Payment to creditors is an expense and will therefore appear in the Projected Income Statement.

• True

• False

What is the main purpose of preparing the Cash Budget?

• To project future receipts and payments.

• Estimated projected figures for the future.

Name TWO items that will appear in the Cash Budget, but not in the projected Income Statement?

• Provision for bad debts adjustment and discount allowed

• Purchase of assets and payments to creditors.

• The selling price for a vehicle sold and the profit made from the sale.

Name TWO items that will appear in a Projected Income Statement, but not in the Cash Budget?

• Provision for bad debts adjustment and discount allowed.

• Purchase of assets and payments to creditors.

• The selling price for a vehicle sold and the profit made from the sale.

Explain ONE similarity between a Cash Budget and a projected Income Statement?

• To project future receipts and payments.

• Estimated projected figures for the future.

Depreciation is not included in the cash budget because it is an imputed expense ?

• True

• False