Assesment 2 1.2a confusion

Kx922

Hello there,

Would someone be kind enough to assist with a question please?

The question is "Explain four weaknesses in how the cash budget has been prepared"

I'm having a look at the answers and I'm a little bit confused.

"Sales receipts have been calculated based on the previous year (1). The timing and/or level of cash receipts may be completely different to those of the previous year (1)."

If you was preparing a budget, isn't the sales receipts of the previous year is the best information to go by to forecast for the current year? So I don't see how that is a weakness in how the cash budget was prepared, If the question was "List Weaknesses of a budget" then that would work. But the question is asking for something different.

For example to compare, "Direct labour costs have been split equally over the year (1). The payments have not been linked to the pattern of sales receipts. (1)."
I understand this one, this could be improved. It's a clear weakness that the person drafting the budget didn't take into account, while preparing the budget.