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Dear Tutor, I have a question which I faced in real life
are all expenses in P/L will be the same figures in Cash Budget except for non-cash items?
Say for example
Salaries
Business Travel
Communication
Insurance
Repair Expenses
Marketing/Advertising
Rent
Transport
Other fixed costs
VAT
Tax on profit
Other taxesNo.
In the statement of profit or loss we show the total expense for the period (regardless of how much cash has been paid).
In the cash budget we show the actual cash receipts and payments.
This is Paper FA, not Paper FM.
If my cash budget preparation covers one year of all pays and expenses then it will be the same figure in the P/L except for amortization.
I asked this question because I 2017 cash budget coverng the whole one year and I have also P/L when I reconcile both of them I see total fixed expenses is not the same as in the P/L during the year. In the p/l, total expense is less than the amount showed in cash budget therefore I confused.
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