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Preparing a cash budget is part of the process. A. control B. cash C. monitoring D. planning

Question

Preparing a cash budget is part of the process.

A. control
B. cash
C. monitoring
D. planning

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Solution

The question asks about the process that involves preparing a cash budget. In financial management, a cash budget is typically part of the planning process as it helps organizations forecast their cash inflows and outflows over a specific period.

Detailed Explanation:

  • Control: This involves overseeing various financial activities and ensuring adherence to budgetary constraints, but it's not specifically about preparing a cash budget.
  • Cash: This term generally refers to the liquid financial resources of an organization but does not relate to the process of budgeting.
  • Monitoring: This refers to the ongoing review and assessment of financial activities and budgets, but it does not pertain directly to the initial preparation phase.
  • Planning: This is the process of setting objectives and determining a course of action to achieve them, which includes preparing cash budgets to anticipate future cash requirements.

Thus, the correct answer is D. planning.

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