BFIN U1 Cash Budget Quiz 3

What is the primary purpose of a cash budget? 

• To increase sales revenue

• To forecast cash inflows and outflows

• To reduce employee salaries

• To eliminate all debts

Which of the following is a way to manage a cash surplus? 

• Collecting outstanding debts

• Postponing a major purchase

• Investing in business opportunities

• Increasing inventory purchases

What does the closing balance in a cash budget represent? 

• The total revenue generated in a period

• The amount of cash available at the end of the reporting period

• The total expenses incurred in a period

• The profit earned in a period

Which of the following is a benefit of holding employees and departments accountable through a cash budget? 

• Increasing sales revenue

• Reducing employee salaries

• Assessing performance and making necessary adjustments

• Eliminating all debts

What is the effect of credit terms on the cash flow of a business? 

• It increases cash inflows

• It decreases cash inflows

• It has no effect on cash inflows

• It increases cash outflows