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SingaporeAccountingQuick questions

Budgeting and Decision Making

Quick questions on Budget preparation explained: H2 Principles of Accounting

5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.

What are the chain of functional budgets?
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Budgets are prepared in a logical sequence, each feeding the next:
What is the cash budget?
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The cash budget lists expected receipts and payments month by month and rolls the closing balance into the next month's opening balance:
What is q1?
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Sales are 40004\,000 units, desired closing inventory 700700, opening inventory 500500. Find the production budget. [2 marks]
What is q2?
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Opening cash is \10\,000,receipts, receipts \4500045\,000, payments \52\,000$. Find the closing balance and comment. [2 marks]
What is q3?
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Explain why depreciation does not appear in a cash budget. [2 marks]

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