Name the type of budget which is prepared to determine the net cash position.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- cash budget.
Cash budget is the type of budget which is prepared to determine the net cash position.
It is a basic tool in the management of cash. It is a device to help the management to plan and control the use of cash. It is a statement showing the estimated cash inflows and cash outflows over a given period. The net cash position is determined by the cash budget i.e., inflows minus (–) outflows = surplus or deficiency.