Question

1.Why is it important to draw up Cash Budget? 2.What are the two items not in...

1.Why is it important to draw up Cash Budget? 2.What are the two items not in a projected income statement? Thanks in Advance. :)

Homework Answers

Answer #1

1.) A cash budget is very important, especially for smaller companies. It allows a company to establish the amount of credit that it can extend to customers without having problems with liquidity. A cash budget helps avoid a shortage of cash during periods in which a company encounters a high number of expenses.

2.) The two items not in a projected income statement are:-

* Extraordinary Items: These items are gains or losses in a company's financial statements that are unlikely to happen again.

* Nonreccuring Items: A nonrecurring item refers to an entry that is infrequent or unusual that appears on a company's financial statements.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Discuss the differences between a cash budget and an operating budget. Why might both be important...
Discuss the differences between a cash budget and an operating budget. Why might both be important to a small business?
Why is it important for an entrepreneur not only to create a cash budget, but also...
Why is it important for an entrepreneur not only to create a cash budget, but also to decide how it will be used within the firm?
Why is it important for an entrepreneur not only to create a cash budget, but also...
Why is it important for an entrepreneur not only to create a cash budget, but also to decide how it will be used within the firm?
why is it important for a firm (and individuals) to prepare a cash budget? How can...
why is it important for a firm (and individuals) to prepare a cash budget? How can firms deal with a cash shortage how should they deal with a cash surplus
1. What is a company's cash conversion cycle and why is it important? 2. What is...
1. What is a company's cash conversion cycle and why is it important? 2. What is the likely impact of a shorter credit period on accounts receivable? 3. What is the likely impact of a loose credit policy on sales?
1) Why is your personal Net Worth important to know? 2) Why should a business owner...
1) Why is your personal Net Worth important to know? 2) Why should a business owner understand their Net Worth? 3) Why is your personal Income Statement important to know? 4) Why is a business' Income Statement important to an investor?
What are budget variances, how are they calculated, and why are they important?
What are budget variances, how are they calculated, and why are they important?
2. What is priming a pump? Why is it important before initial start-up?
2. What is priming a pump? Why is it important before initial start-up?
In your own words, explain what a budget is and why it is important for a...
In your own words, explain what a budget is and why it is important for a business to have a budget.
Why aren’t a firm’s cash flows equal to its profits? Why is it important to keep...
Why aren’t a firm’s cash flows equal to its profits? Why is it important to keep up with cash separate from income? (4 points) I need this answered in detailed at least a paragraph.