Cash Budget Definition
A Statement showing expected receipts and payments (of both trading and capital nature) over a period of time , prepared with the intention of planning and controlling the  use of cash.
Â
Preparation of Cash Budget
| Particulars | Jan. 2010 | Feb. 2010 | Mar. 2010 |
| Opening Balance | |||
| RECEIPTS | |||
| 1) Cash Sales | 80000 | ||
| 2)Receipts from Debtors
-after one mth. -after 2 mths. |
48000 |
72000 |
|
| 1)     Income from
2)Â Â Â Â Â Invt. |
|||
| 4) | |||
| Total Receipts | |||
| Â | |||
| PAYMENTS | |||
| 1) Cash Purchases | |||
| 2) Payment to Creditors | |||
| 3) Payment of Wages | |||
| Â | |||
| Total Payments | |||
| Closing Balance |
Eg. 1) Total Sales of Jan 2010 are 400000. 20% Cash Sales. 40% of credit sales are paid in next month and balance in second month.
-à It means 80000 are cash sales received in Jan.2010 & 120000 credit sales. Of 120000, 40% ie. 48000 shall be received in Feb.2010 and balance 72000 in March 2010
2)     If specifically given closing cash balance is to be maintained every month.
à Take it as closing cash balance and balancing figure should be taken as
payment to debtor in that month.
2 Comments