cash budget

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi can anyone help?

Explain how depreciation would affect the following:

A cash budget
the calculation of profit in a business.

Please can anyone help.

Aly :?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash budget

    depreciation is a none cash expense so it wouldnt affect a cash budget, but it will reduce your profit.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash budget

    Thanks for answering my question. sorry if i might seem a bit thick but i could not get my head round the question. Im having a bad day.

    Thanks again

    Aly :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash budget

    no probs i did my AAT years ago but sometimes my brain just decides to throw even the most basic knowledge away sometimes and I have to re-learn it.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash budget

    Hi Lincs,

    Wonder if you can help me again.

    give four reasons why the net profit of a business may differ from the net cash flows.

    I can only think of two reasons that i think might be right they are:

    the cost incurred at the start of the business
    the provisions like depreciation.

    Please help

    Aly :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash budget

    Accruals & Prepayments
    Investments/Divestment in stock,debtors/creditors etc
    Injections of share capital
    Injections of debt e.g. bank loans
    Issue of debentures
    etc.

    If you look at the layout and calculations of a cash flow statement it would give you all the ideas.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash budget

    Thanks,
    sorry for being a pain but my head is just in the clouds today, trying to cope with doing my homework and sorting out my two children who are fighting all the time.

    Thanks again

    Aly :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:cash budget

    Ask as many queries as you want, im only here studying most of the time for my degree anyway. (well not tonight im going out for a few)

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