D076 Unit 5 Question and answers
verified to pass 2025/2026
What is the name for a forecast of short-term events that helps a company understand if it has sufficient
cash? - correct answer ✔Cash budget
What is the purpose of a monthly cash budget? - correct answer ✔To control cash inflows and outflows
so you can balance income with expenditures and savings
In which situation would a firm need to borrow cash? - correct answer ✔When the beginning cash
balance plus the net cash is less than the minimum cash balance required for the month
How can you use the envelope method of budgeting to monitor cash flows? - correct answer ✔Put the
amount of money budgeted for each category of your expenses into labeled envelopes and then spend
the money in each envelope on expenses in that category.
How should you go about making changes to your budget? - correct answer ✔Prioritize the changes
you want to make and then implement them gradually one by one to make sure they work.
You are a financial manager of a company. The marketing department has informed you that the
projected sales growth for the upcoming year is 15%. As you conduct financial forecasting, you increase
cash, accounts receivable, and inventory accounts by 15%—the same as the projected sales growth.
What type of accounts are these? - correct answer ✔Spontaneous accounts
What does it mean when a firm's calculated discretionary financing needed (DFN) is negative? - correct
answer ✔The firm will have enough financing to fund projected sales.
Which account is a spontaneous account? - correct answer ✔Accounts payable
verified to pass 2025/2026
What is the name for a forecast of short-term events that helps a company understand if it has sufficient
cash? - correct answer ✔Cash budget
What is the purpose of a monthly cash budget? - correct answer ✔To control cash inflows and outflows
so you can balance income with expenditures and savings
In which situation would a firm need to borrow cash? - correct answer ✔When the beginning cash
balance plus the net cash is less than the minimum cash balance required for the month
How can you use the envelope method of budgeting to monitor cash flows? - correct answer ✔Put the
amount of money budgeted for each category of your expenses into labeled envelopes and then spend
the money in each envelope on expenses in that category.
How should you go about making changes to your budget? - correct answer ✔Prioritize the changes
you want to make and then implement them gradually one by one to make sure they work.
You are a financial manager of a company. The marketing department has informed you that the
projected sales growth for the upcoming year is 15%. As you conduct financial forecasting, you increase
cash, accounts receivable, and inventory accounts by 15%—the same as the projected sales growth.
What type of accounts are these? - correct answer ✔Spontaneous accounts
What does it mean when a firm's calculated discretionary financing needed (DFN) is negative? - correct
answer ✔The firm will have enough financing to fund projected sales.
Which account is a spontaneous account? - correct answer ✔Accounts payable
