7/8/2019 Cash Budget - Finance (MCQ) Questions and answers

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1) In a month, payment for salary was Rs. 5,750 when

the lag in payment of salary is 1/8 month. If total
salaries of current month are Rs 6,000, determine the
salaries of previous month.

a. Rs 4,800
b. Rs 4,250
c. Rs 4,000
d. Rs 4,750

Answer Explanation

ANSWER: Rs 4,800

Explanation:
No explanation is available for this question!

2) Cash budget deals with historical data whereas

Cash Flow Statement deals with future data.

a. True
b. False

Answer Explanation

ANSWER: False ▲
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3) InAptitude
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a. Deducted from opening balance of cash

b. Added to opening balance of cash
c. Not included in cash budget
d. None of the above

Answer Explanation

ANSWER: Deducted from opening balance of cash

Explanation:
No explanation is available for this question!

4) As per Cash flow method Increase in current

liabilities and decrease in current assets are

a. Deducted from opening balance of cash

b. Added to opening balance of cash
c. Not included in cash budget
d. None of the above

Answer Explanation

ANSWER: Added to opening balance of cash

Explanation:
No explanation is available for this question!

5) As per Cash flow method, the amount of expected

net operating cash profit during the fiscal is

a. Added to the opening balance of cash

b. Deducted from the opening balance of cash
c. Not included in cash budget
d. None of the above
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ANSWER: Added to the opening balance of cash

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6) Which of the following method is based on

technique of cash flow statement?

a. Cash Accounting Period

b. Projected Balance Sheet Method
c. Project forecast method
d. None of the above

Answer Explanation

ANSWER: Project forecast method

Explanation:
No explanation is available for this question!

7) Which of the following statements are not true about

Projected Balance Sheet Method?

a. It is good for long-term

b. It is appropriate for annual cash forecast
c. It is of extreme use for planning and control
d. None of the above

Answer Explanation

8) A budgeted balance sheet is prepared in Projected

Balance sheet method and an estimate is made of the
values of all assets including bank overdraft, cash
balance and bank.

a. True
b. False

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9) In a firm, the forecast of wages for month of
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time-lag in
payment of wages is 1/8 month. Determine the amount
of wages payable in each month January to March.

a. Rs 6,750, Rs 6,350 and Rs 5,850

b. Rs 5,850, Rs 6,350 and Rs 6,750
c. Rs 5,850, Rs 6,750 and Rs 6,350
d. None of the above

Answer Explanation

10) Given estimated sales in February, March, April,

May and June are Rs 90,000, Rs 96,000, Rs 54,000, Rs
87,000 and Rs 63,000. In case 50% of sales are realized
in the next month and balance in the next of next
month, determine cash collection from sales in April
and May.

a. Rs 93,000 and Rs 75,000

b. Rs 93,000 and Rs 70,500
c. Rs 75,000 and Rs 70,500
d. None of the above

Answer Explanation

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