Cash budgets – ACCA Financial Management (FM)
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The credit sales are paid two months after the month of the sale. them why is sale eg November paid in Jan instead of February. why?
Hello, thank you for your clear explanation.
Question nr. 56 in Exam kit, needs to find the Sales Receipt for March only, and I see that the bad debts are not calculated at all.
Shouldn鈥檛 we subtract them from the sales receipts for March only?
Thank you so much!
@John Moffat can I get a response please 馃檨
You must ask this sort of question in the Ask the Tutor Forum and not as a comment on a lecture. Also, if you are referring to the Kaplan Exam Kit then I do not have a copy (I only have the BPP Revision Kit).
Hi
la*********@gm***.com
,
I see you commented on this lecture back in February, so I’m assuming you’ve taken the exam and I hope it went well.
Were you able to find out the answer to the above question? If yes can you kindly post on here please
Thanks,
2kuayyaz
Sir, I remember that in a lecture you mentioned 4 important topics for the Section C of the exams. Can you kindly recall those?
The syllabus states that the two 20-mark questions will mainly come from the working capital management, investment appraisal, and business finance areas of the syllabus.
Only business finance or business valuations as well? ?
close the business down its not profitable, how a business can increase sales by 100% but at the same time increase its purchases by 300% is mad.
This company should have done the draft P&L then shut shop and not wasted the accounts departments time asking them to do a cash flow at all.
Interesting observation 馃檪
The opening cash balance $15.000 shouldn’t been for NovX1?
I must change the wording of the question to make it clear that it is the balance at the beginning of January (otherwise it would not be possible to do the question because there would not be enough information 馃檪 )
Thank you very much
You are welcome 馃檪
That’s great you’ve mentioned this. I went crazy when during the lecture, I’ve said it’s an opening balance for Jan.
Generally speaking, I hate assumptions like this or 360/365 days a year etc.
Anyway, you are the hero John. This page is a gigantic effort.
all the best,
Maciej
Thank you for your comment 馃檪
The business should consider ways of managing cash surplus/deficit when they arise using a variety of options for example if a deficit occur the business might decide to seek an overdraft of curtail cost like capital expenditure and defer dividends. Likewise if there is a surplus the business can invest it, repay loans etc
Do we have to know the cash budget proforma?Is it possible to get a question like example 1?
The exact layout is not so important, although the layout I do for the example is the best. And yes, you could be asked to prepare a cash budget like example 1.
Thank you sir
You are welcome 馃檪
Hello, thank you very much for your full explanation. There is one thing which I don’t understand in your workings:
75% of wages being paid in the current month and 25% in the following month:-
Why are you using January for 75% wages as the current month and 25% wages December for the following month?
Is the current month not Nov if the following month is Dec?
I am also confused about that
The first month required for the cash budget is January.
75% of January’s wages are actually paid in January.
For December’s wages, 75% will have been paid in December (but that is not relevant for our cash budget given we are first doing it for January), but the other 25% of December’s wages are paid in the month following, which is January (and this is relevant).
(For Novembers wages, 75% will have been paid in November and 25% in December, but again the question asks for the cash budget from January onwards and so neither of the payments for Novembers wages are relevant for January. I assume that you have downloaded the lecture notes and so do have the question in front of you?)