Business Arithmetic — Entrepreneurship STD 12 Commerce — Question

Cash budget gives a prediction of future cash receipts and expenditures for a particular time period. It usually covers a period in the short-term future. The cash budget helps the business to determine, when income will be sufficient to cover expenses and when the company will need to seek outside financing. Cash receipts are in the form of cash sales, collection from debtors, interest and dividend received, etc., and expenditure may be in the form of cash purchases, payment of taxes and statutory fees, payment of utility bills, etc.