- 1 Marks
Question
Which of the following is NOT a purpose of cash budgeting?
A. To ensure availability of working capital throughout the period concerned
B. To determine the timing of cash inflows and outflows in advance
C. To plan on investing surplus cash whenever it arises
D. To plan against likely cash deficits during the budget period
E. To reduce cost of operation
Answer
E. To reduce cost of operation
Explanation: Cash budgeting helps a company manage its cash inflows and outflows to ensure liquidity, plan for surplus or deficit, and maintain working capital. However, reducing operational costs is not a direct purpose of cash budgeting, which is why “E” is the correct answer.
- Tags: Cash Budgeting, Working Capital
- Level: Level 1
- Uploader: Theophilus