Estimated cash inflows and cash outflows are _________a)Rulesb)Budgetc)Procedured)ProgrammeCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

The correct option is Option B.

A cash flow budget is a summary of the projected cash inflows and outflows for a business over a period of time. The time period is usually a future accounting period and is divided into quarters or months.

Answer

'Budget' refers to the quantitative expression of plan of action. So, Option 'Budget' are correct

Answer

Cash inflows and cash outflows are an essential part of cash budgeting, which is a financial planning tool used by businesses to estimate and manage their cash flow. Cash inflows refer to the money that is expected to be received by the business, while cash outflows represent the cash that is expected to be paid out by the business.

What are cash inflows?
Cash inflows are the sources of money that a business expects to receive during a specific period. These inflows can come from various sources such as sales revenue, loans, investments, and other forms of income. Some common examples of cash inflows include:

1. Sales revenue: This is the primary source of cash inflow for most businesses. It represents the money received from selling products or services to customers.

2. Loans: If a business takes out a loan from a bank or other financial institution, the amount received is considered a cash inflow.

3. Investments: If a business has invested in stocks, bonds, or other financial instruments, any dividends or interest received from these investments are considered cash inflows.

4. Grants and subsidies: In some cases, businesses may receive grants or subsidies from government or non-profit organizations. These funds are also considered cash inflows.

What are cash outflows?
Cash outflows, on the other hand, are the expenses or payments that a business expects to make during a specific period. These outflows can include various types of expenses such as salaries, rent, utilities, raw materials, and other operating costs. Some common examples of cash outflows include:

1. Operating expenses: These are the day-to-day expenses incurred by a business to operate efficiently. They include items such as salaries, rent, utilities, office supplies, and marketing expenses.

2. Cost of goods sold: This refers to the direct costs associated with producing or purchasing the products or services that a business sells.

3. Loan repayments: If a business has taken out a loan, it will have to make regular repayments of principal and interest. These repayments are considered cash outflows.

4. Taxes: Businesses are required to pay various taxes, such as income tax, sales tax, and payroll tax. These tax payments are considered cash outflows.

Why is cash budgeting important?
Cash budgeting is important for businesses because it helps them to effectively manage their cash flow. By estimating both cash inflows and cash outflows, businesses can plan for any potential cash shortages or surpluses. This allows them to make informed decisions about financing, investing, and operating activities. Cash budgeting also helps businesses to identify areas where they can reduce expenses or increase income to improve their overall financial performance. Additionally, it provides a framework for monitoring and controlling cash flow on an ongoing basis, which is crucial for the long-term sustainability of a business.

In conclusion, estimated cash inflows and cash outflows are an integral part of cash budgeting. They represent the expected sources and uses of cash for a business during a specific period. By accurately estimating and managing these cash flows, businesses can ensure that they have sufficient funds to meet their financial obligations and pursue growth opportunities.

Answer

B. budget

Answer

Cash inflows and cash outflows are budget. As budget is a statement of expected result expressed in numerical terms over a particular time period. it facilities comparision of actual results with the planned ones

Answer

The correct option is Option B.

A cash flow budget is a summary of the projected cash inflows and outflows for a business over a period of time. The time period is usually a future accounting period and is divided into quarters or months.

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