The purpose of cash budgets is to determine how much cash the company will have at the end of the year. Do you agree? Explain.

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preview of the answer..

I do not agree with this statement because cash budgets are records of company’s cash inflows and outflows at any given time and not necessarily at the end of the year. As such, cash budgets can be reviewed at any time to give the company’s cash status. Setting a cash budget at the end of the year is risky because a company can have problems when making financial decisions. Therefore, it would be wrong to assume that cash budgets are only useful at the end of the year because they should be..