A cash flow budget is primarily concerned with which measure?

A cash flow budget is primarily concerned with which measure?

• A. Net income
• B. Cash inflows
• C. Accounts receivable aging
• D. Money on hand at the end of the period

Answer: (D)

Cash flow budgeting focuses on liquidity—the actual cash you have available as time passes. It tracks money coming in and going out to see what will be on hand at the end of the period. The measure it highlights is the ending cash balance, the amount of cash you have after all inflows and outflows are accounted for. Net income reflects profitability under accrual accounting, not the cash you actually can spend. Waiting on receivables aging helps with forecasting timing of cash receipts, but it doesn’t by itself tell you how much cash is left at period end. Cash inflows matter, yet without considering outflows, you can’t determine the real ending cash position. So the ending cash balance is the best answer.

Cash flow budgeting focuses on liquidity—the actual cash you have available as time passes. It tracks money coming in and going out to see what will be on hand at the end of the period. The measure it highlights is the ending cash balance, the amount of cash you have after all inflows and outflows are accounted for. Net income reflects profitability under accrual accounting, not the cash you actually can spend. Waiting on receivables aging helps with forecasting timing of cash receipts, but it doesn’t by itself tell you how much cash is left at period end. Cash inflows matter, yet without considering outflows, you can’t determine the real ending cash position. So the ending cash balance is the best answer.