Question Which of the following statement(s) is/are true about a cash budget? (Select the correct answer from the options below the statements) (1) A cash budget informs about whether or not there will be a cash surplus / deficit (2) Acash budget informs about the assets and liabilities of a given entity (3) A cash budget informs about the depreciation costs of assets (1) only (1) and (2) All of the above None of the above

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Question Which of the following statement(s) is/are true about a cash budget? (Select the correct answer from the options below the statements) (1) A cash budget informs about whether or not there will be a cash surplus / deficit (2) Acash budget informs about the assets and liabilities of a given entity (3) A cash budget informs about the depreciation costs of assets (1) only (1) and (2) All of the above None of the above

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## Step 1: Understanding the optionsA cash budget presents an entity's expected cash inflow and outflow during a specific period, mainly to understand cash surplus or deficit situations. ## Step 2: Evaluating each option 1. This statement is true since a cash budget details the cash inflow and outflows, informing us whether there'll be a cash surplus or deficit.2. Although it's tied to a firm's financial standing, a cash budget doesn't directly illustrate the assets or liabilities—they are depicted in other financial documents like the balance sheet.3. A cash budget doesn't represent the depreciation costs of assets. These figures mainly belong to the Profit & Loss Account or Depreciation Schedule if the entity has fixed assets.

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