CIMA Exam CIMAPRA19-F01-1 Topic 6 Question 87 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 87
Topic #: 6

Which of the following is correct?

The primary purpose of a cash budget prepared on a monthly basis is to determine:

Anext month's sales volumes.

Bthe amount of inventory to purchase in the following month.

Cwhen to pay employees salaries.

Dwhether there will be sufficient cash in the bank to meet requirements.

Show Suggested Answer

Suggested Answer: D

by Leatha at May 09, 2024, 06:02 PM

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6 months ago

Exactly. The primary purpose should be ensuring sufficient cash, so answer is D.

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7 months ago

Those might be parts of it, but the primary goal is cash flow management.

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7 months ago

Yeah. But why not focus on inventory purchases or salaries?

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7 months ago

Makes sense. Cash budget is about managing liquidity, right?

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7 months ago

I think it's D. It's about ensuring there's enough cash to meet needs.

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7 months ago

This question is tricky. What's the main idea of a cash budget?

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