Question

1. Provide three (3) differences between a cash budget and an Income statement.

2. How would an event such as a global pandemic affect the Budget process

Answer 1

1. Difference between Cash Budget and Income Statement

- Cash Budget show all collections and disbursements of cash during the month/period. whereas Income statement show all income and expense on accrual basis during the period.

- Cash Budget is not a part of financial statement whereas Income statement is a part of Financial Statement.

- Cash Budget only included transactions related to Cash whereas Income statement also includes transactions which in non-cash i.e. Depreciation.

- Cash Budget is prepared on the basis of assumption whereas mostly Income statement is prepared on actual basis.

2. How event such as global pandemic affect the Budget Process.

Now in a global environment every economy is inter-dependent and therefore it may also affect the business of others. Every organization prepart their Budget and try to achieve that but now in this global pandemic i.e. COVID-19 all import and export of goods are closed and most of country is in lockdown and this is impacting the business and affecting the budget process of company. Even after end of this global pandemic it would be very difficult for company to maintain their budget.

I hope this clear your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

Do give a thumbs up if you find this helpful.