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

Budgeting and budgetary control — practice question

Refer to Source A in the insert.
(a(i))[2]

State two benefits that result from preparing a cash budget.

(a(ii))[2]

State two benefits that come from preparing a production budget.

(b)[4]

Prepare the production budget (in units) for each month from April to June.

(c)[4]

Calculate the payments to suppliers for each month of April, May and June.

(d)[6]

Prepare the cash budget for each month of April, May and June.

(e)[7]

Advise the directors on which option to choose. Justify your answer.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Making certain that payments can be met and cash shortages / liquidity problems do not occur.

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