Question

Which of the following statements regarding cash flows is true? Many managers consider cash flow budgets to be the least important of all the budgets. As long as accounting revenues exceed accounting expenses, cash flow budgets do not have to be prepared. It is possible for cash receipts to exceed revenues earned in a given month. As long as a manager is confident that there will eventually be a cash receipt from a customer, the timing of the cash receipt is not important.

Answer 1

It is possible for cash receipts to exceed revenues earned in a given month.

Step-by-step explanation:

Cash receipts will surely exceed revenues in a scenario where there is a reception of a cash advance payment, which is classified as deferred revenue under the accrual method.

Therefore, the correct statement is - it is possible for cash receipts to exceed revenues earned in a given month.