D076 Module 8 Questions with
complete solution 2025/2026
After W&H Inc. has developed a cash budget, what should the company do in the following months? -
correct answer ✔It should monitor its actual cash flows and then revise the cash budget if needed.
W&H Inc.'s labor costs each month are an example of which item in a cash budget? - correct answer
✔Cash disbursement
Why would creating a cash budget be useful for W&H if the firm needs a loan from the bank or another
short-term lender? - correct answer ✔Cash budgets increase the lender's trust in a firm by
demonstrating the firm's ability to make profits and repay loans.
How do the benefits of knowing the cash position for each period differ between businesses and
individuals? - correct answer ✔Knowing the cash position allows businesses to recognize when short-
term loans are needed, while it allows individuals to analyze progress toward their personal financial
goals.
What is the difference between tracking and monitoring cash flows? - correct answer ✔Monitoring
involves using your tracking record to evaluate cash flows against your target, identify patterns and
changes in cash flows, and gauge when correction is needed.
What is the main reason why it is important to track and record cash flows? - correct answer ✔Tracking
your cash flows allows you to recognize where and how your money is spent so you can monitor your
cash flows and revise your budget as needed.
In what situation might the software method of tracking be preferable to the spreadsheet method of
tracking? - correct answer ✔When a person has a hard time remembering to record their cash flows
and when they prefer to use a card to make purchases
complete solution 2025/2026
After W&H Inc. has developed a cash budget, what should the company do in the following months? -
correct answer ✔It should monitor its actual cash flows and then revise the cash budget if needed.
W&H Inc.'s labor costs each month are an example of which item in a cash budget? - correct answer
✔Cash disbursement
Why would creating a cash budget be useful for W&H if the firm needs a loan from the bank or another
short-term lender? - correct answer ✔Cash budgets increase the lender's trust in a firm by
demonstrating the firm's ability to make profits and repay loans.
How do the benefits of knowing the cash position for each period differ between businesses and
individuals? - correct answer ✔Knowing the cash position allows businesses to recognize when short-
term loans are needed, while it allows individuals to analyze progress toward their personal financial
goals.
What is the difference between tracking and monitoring cash flows? - correct answer ✔Monitoring
involves using your tracking record to evaluate cash flows against your target, identify patterns and
changes in cash flows, and gauge when correction is needed.
What is the main reason why it is important to track and record cash flows? - correct answer ✔Tracking
your cash flows allows you to recognize where and how your money is spent so you can monitor your
cash flows and revise your budget as needed.
In what situation might the software method of tracking be preferable to the spreadsheet method of
tracking? - correct answer ✔When a person has a hard time remembering to record their cash flows
and when they prefer to use a card to make purchases
