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Chapter 18 & 19 and Part Chapter 20
Chapter 18 & 19 and Part Chapter 20
Accrual basis
Sales ($40+$60+$100) 200
Purchases (100)
Profit 100
Comparing accrual accounting and cash accounting, what is the difference in the surplus
for the period?
A $16,600
B $17,600
C $2,400
D $3,400
Chapter 19
Cash and Treasury
Management
Objective of the syllabus
• The opening cash balance is added to the net inflow/outflow to provide the available cash balance at
the end of the period. The closing cash balance at the end of each period represents the opening
balance for the next period.
• The annual cash budget is usually broken down into much shorter periods: weeks, months, quarters
or half-years.
• Cash budgets do not recognize non-cash transactions such as depreciation or provisions.
Items in Cash Budget
• A cash budget is prepared to show the expected receipts of cash and payments of cash
during a budget period.
Receipts of cash Payments of cash
What amount of overhead should be included in the cash budget for January?
A $23,200
B $22,700
C $33,900
D $28,500