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Excise duty is typically not deducted from the cash balance in a cash budget because it is considered an indirect tax that is applied to the sale of goods rather than a direct outflow of cash. The cash budget primarily focuses on actual cash inflows and outflows, and excise duty liabilities are often settled at a later date when goods are sold or manufactured. Therefore, it is accounted for separately to provide a clearer picture of available cash for operational needs.
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What information is needed in order to prepare a cash budget?
A cash budget begins with the starting cash balance to which cash inflows are added to get cash available.
Why are cheques deposited in bank but not cleared added to cash book credit balance?
bcoz it has been deducted earlier from the cash book credit balance (if any), at the date it was deposited
Which budget is NOT necessary to prepare the budgeted balance sheet?
budget statement of cash flow
What is accounting treatment of drawings?
Drawing are goods or cash taken from business by the Owner for this personal use. Drawing of goods will be deducted from the amount of purchases in Income statement and also from the Owner's equity in Balance sheet. Drawing of cash will be just deducted from Owner's equity in balance sheet. Opening Capital Add Profit Add Additional Capital Less Drawings (Cash + Goods) -------------------------------------- = Closing Capital
What are the three sections of a cash budget?
A cash budget typically consists of three main sections: cash inflows, cash outflows, and the cash balance. The cash inflows section details all expected receipts, such as sales revenue and other income sources. The cash outflows section lists all anticipated expenditures, including operating expenses, capital expenditures, and any debt repayments. The cash balance section reconciles the inflows and outflows, showing the net cash position at the end of the budget period.
What information is needed in order to prepare a cash budget?
A cash budget begins with the starting cash balance to which cash inflows are added to get cash available.
Why are cheques deposited in bank but not cleared added to cash book credit balance?
bcoz it has been deducted earlier from the cash book credit balance (if any), at the date it was deposited
Which budget is NOT necessary to prepare the budgeted balance sheet?
budget statement of cash flow
Convertible to cash or reguires an outlay of cash within 12 months of the date on the balance sheet?
cash budget
What does it mean to surrender a life insurance policy?
It means you want to cancel the policy. If there is cash value in the policy, surrender charges will be deducted from the cash value and you will get the remaining balance.
The cash budget must be prepared before you can complete the?
budgeted balance sheet
What is accounting treatment of drawings?
Drawing are goods or cash taken from business by the Owner for this personal use. Drawing of goods will be deducted from the amount of purchases in Income statement and also from the Owner's equity in Balance sheet. Drawing of cash will be just deducted from Owner's equity in balance sheet. Opening Capital Add Profit Add Additional Capital Less Drawings (Cash + Goods) -------------------------------------- = Closing Capital
What are the three sections of a cash budget?
A cash budget typically consists of three main sections: cash inflows, cash outflows, and the cash balance. The cash inflows section details all expected receipts, such as sales revenue and other income sources. The cash outflows section lists all anticipated expenditures, including operating expenses, capital expenditures, and any debt repayments. The cash balance section reconciles the inflows and outflows, showing the net cash position at the end of the budget period.
How to make Journal entry for expenses of employees paid from petty cash and deducted in payroll?
Debit employee expensesCredit cashDebit payrollCredit cash (balance amount)credit employee expense
When reconciling a bank account the outstanding checks are?
When reconciling a bank account, outstanding checks are checks that have been issued and recorded in the company's books but have not yet cleared the bank. These checks reduce the company's cash balance but have not yet been deducted from the bank statement. During reconciliation, outstanding checks are deducted from the bank's ending balance to arrive at the true cash balance. It's important to account for these checks to ensure an accurate reconciliation of the bank account.
Does the pro forma income statement and balance sheet need to be created before the cash budget is completed?
Yes
Where do accounts receivable go on the balance sheet?
Paid accounts receivable appears on a balance sheet, to the extent that the amounts paid are deducted from the accounts receivables balance and added to the bank account. Therefore, the effect on the balance sheet would be as follows: decrease in asset- accounts receivables increase in asset- Cash
