Final answer:
To prepare an organization’s cash budget, the budgeted statement of cash flows is required because it provides a forecast of cash transactions. A balance sheet is helpful but is not sufficient alone for preparing a cash budget.
Step-by-step explanation:
The document required to prepare the cash budget of an organization is the budgeted statement of cash flows. This is because the cash budget is a forecast of the company's cash inflows and outflows over a specific period of time.
A budgeted statement of cash flows provides detailed insights into the expected cash transactions, which is essential for preparing a cash budget. Factors like receipts from sales, payments for expenses, capital expenditure, financing activities which may include issuance of bonds, or bank capital changes, and other cash transactions all contribute to what will be detailed in a cash budget.
Understanding a company's balance sheet is also helpful in this process as it shows the company's financial position at a single point in time, including the cash on hand, which can kickstart the cash budgeting process. Nevertheless, the balance sheet itself does not offer the forecasted cash transaction flows needed for a cash budget.