Discuss the purpose of the cash budget and if the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used? Must be 100 words.
Actual purpose of cash budget is to provide the company with the
statement of available cash inflow and outflow.
Cash budget is prepared monthly, quarterly or early as per the requirement of the company. It also provides the status of the company's cash at a specified period of time.
Cash budget prepared to see whether the company is having excess cash for its working.
Excess cash might be used for the following purposes :-
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