Question

Which of the following cash budget equations is incorrect? Multiple Choice Period one ending cash balance = period two beginning cash balance Beginning cash + cash receipts = total cash available Cash payments + cash cushion = total cash needed Cash payments + cash receipts = cash requirements

Answer 1

Cash payments + cash receipts = cash requirements

Step-by-step explanation:

The cash budget is a budget which deals in a inflow and outflow of cash. The inflow of cash refers to the incoming of cash through receipts while the outflow of cash refers to the outgoing of cash through payments

It interprets the liquidity of the business organization whether organization has enough cash or it can be borrowed for running its organization

Therefore, the Cash payments + cash receipts = cash requirements is wrong as other equations that are given are right