Question

Which one of the following statements is correct? 

A. Ending Cash Balance on the Cash Budget is an input to the SG&A Budget. 

B. Ending Cash Balance on the Cash Budget is an input to the Forecasted Income Statement. 

C. Ending Cash Balance on the Cash Budget is an input to the Sales Budget. 

D. None of the above statements are correct.

Answer 1

Answer : D None of the above statements are correct.

the other statements are not correct

A. Ending cash balance on  cash budget is an input to SG & A budet .

Explanation

SG & A is budget realted to the expenses to be incurred by the organistion in the future and it will includes the expenses rent, advertisment, marketing , accounting , travel, and salary and more expenses. so in this budget there is no such opening cash balance is required.

b Ending cash balance on cash budget is an input to forcasted income statment

Explanation

forcasted income statement is the statement in which all the forcasted income and expenditure is depicted to find out the future proift and loss. in this statement no opening cash balance is taken.

c Ending cash balance on cash budget is an input to the sales budget.

Explanation

sales budget the future sales forcast of the organisation that how organisation to make the sales in future and how much cash is generated from the furture cash sales.

the out put of future cash sales from the sales budget is the part of the cash budget. in which cash sales is taken in the receipt side of the cash budget.

so it will clear that no opening cash balance is taken in the sales budget of the organisation.