Cash budget
Aside from the cash budget, what are some of the multitude of different budgets that comprise the Master Budget?
The cash budget is similar to the statement of cash flows. It shows the beginning and ending cash balances. There are 3 sections- cash receipts , cash disbursements, and financing. It is a breakdown of where cash came in and where cash went out. The difference here is that a budget is expected cash inflows, expected cash outflows and expected borrowing and repayments. Preparing and following a cash budget contributes to more effective cash management. It shows managers the need for additional financing before actual need arises and it indicates when excess cash will be available.
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