Spartan Furniture’s controller wants to show managers where the firm m

QUESTION

Spartan Furniture’s controller wants to show managers where the firm may have shortages or surpluses of funds throughout the year so that they can anticipate when they may have to borrow money. Which type of budget does he need?

A) capital budget
B) cash budget
C) master budget
D) operating budget
E) discretionary budget

ANSWER

Answer: B
Explanation: B) The purpose of a cash budget is to show management where it may have cash shortages or surpluses throughout the year so that managers can anticipate when they may have to borrow money and when to repay.