# Cash Budget - Finance (MCQ) Questions and answers

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)   In a firm, the forecast of wages for month of December, January, February and March are Rs 4,800, Rs 6,000, Rs 6,400 and Rs 6,800. The 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 ANSWER: Rs 5,850, Rs 6,350 and Rs 6,750 Explanation: No explanation is available for this question!

3)   Cash budget deals with historical data whereas Cash Flow Statement deals with future data.

a. True
b. False

 Answer  Explanation ANSWER: False Explanation: No explanation is available for this question!

4)   In cash flow method for preparing cash budget, payment of dividends and prepaid payments 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: Deducted from opening balance of cash Explanation: No explanation is available for this question!

5)   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!

6)   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
 Answer  Explanation ANSWER: Added to the opening balance of cash Explanation: No explanation is available for this question!

7)   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!

8)   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 ANSWER: It is of extreme use for planning and control Explanation: No explanation is available for this question!

9)   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

 Answer  Explanation ANSWER: False Explanation: No explanation is available for this question!

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 ANSWER: Rs 93,000 and Rs 75,000 Explanation: No explanation is available for this question!

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