Accounting 9706 · AS & A Level · Budgeting and budgetary control

Budgeting and budgetary control — practice question

Luke’s business will begin on 1 April 2018 and will sell one product sourced from a sole supplier.

(a)[2]

State two advantages that result from drawing up a cash budget.

(b)[11]

Prepare a cash budget covering the three months April, May and June 2018.

(c)[6]

Comment on how Luke manages working capital.

(d)[6]

Prepare a budgeted income statement for the three months to 30 June 2018.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Allow for future cash deficits” …