cash is vital - Because cash is so vital to a company,...

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Because cash is so vital to a company, planning the company's cash needs is a key business activity. It enables the company to plan ahead to cover possible cash shortfalls and to make investments of idle funds. The cash budget shows anticipated cash flows, usually over a one- to two- year period. In this section we introduce the basics of cash budgeting. More advanced discussion of cash budgets and budgets in general is provided in managerial accounting texts. As shown below, the cash budget contains three sections—cash receipts, cash disbursements, and financing —and the beginning and ending cash balances. ANY COMPANY Cash Budget Beginning cash balance (itemized) Cash disbursements (itemized) Excess (deficiency) of available cash over cash
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The Cash receipts section includes expected receipts from the company's principal source(s) of cash, such as cash sales and collections from customers on credit sales. This section also shows anticipated receipts of interest and dividends, and proceeds from planned sales
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This note was uploaded on 11/06/2011 for the course ACCOUNTING ac 201 taught by Professor - during the Spring '11 term at Montgomery.

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cash is vital - Because cash is so vital to a company,...

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