BUDGETARY CONTROL

It shows how the cash level will change over the following months.

Cash budgets are based on the

The goal of the cash budget is to provide management the information on

Forecasting cash flow is an example of a

The cash budget is usually composed of four (4) sections:

The following are the steps in preparing a cash budget:

It consolidates all subsidiary budgets and is normally part of the budgeted profit and loss account, balance sheet, and cash flow statement.

It is prepared during a planning activity based on an estimated sales and production volume.

It is a budget set before the control period, and not subsequently changes in response to changes in activity or costs, or revenues. It may serve as a benchmark in performance evaluation.

It is also designed at the planning stage to vary with activity levels. It is used to show different results from possible activity levels.