Question

Which of the following statements best defines a cash-flow budget?

a. it outlines the assets of the organization
b. it outlines the expenditures and assets of the organization
c. it represents an estimate of income and expenditures
d. it compares the assets of an organization to its liability

Answer 1

A cash-flow budget estimates future income and expenditures over a specific period, aiding financial planning and decision-making.

Step-by-step explanation:

The statement that best defines a cash-flow budget is c. it represents an estimate of income and expenditures. A cash-flow budget is a financial tool used by organizations or individuals to project future income and expenditures over a specific period of time. This budget helps in determining whether the finances can support the planned activities and assists in decision-making regarding spending, investment, and funding.