Asked by Vincent Zhang on Jul 06, 2024
Verified
The cumulative cash surplus shown on a cash budget is equal to the ending cash balance plus the minimum cash balance retained by the firm.
Cumulative Cash Surplus
The total amount of cash that exceeds the initial investment or expenses over a period.
Minimum Cash Balance
The lowest amount of cash that a company aims to hold in its accounts to ensure financial stability and operational efficiency.
- Acquire knowledge on the role and value of cash budgeting in fiscal planning.
Verified Answer
ML
Miguel LeitaoJul 13, 2024
Final Answer :
False
Explanation :
The cumulative cash surplus shown on a cash budget is equal to the ending cash balance, not the ending cash balance plus the minimum cash balance retained by the firm. The minimum cash balance is a target or a buffer the firm aims to maintain, not a figure that is added to the ending cash balance to determine the cash surplus.
Learning Objectives
- Acquire knowledge on the role and value of cash budgeting in fiscal planning.
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