disbursement section

Disbursement section contains the disbursement of raw materials and that is consist of payments for purchases on account in prior periods plus any payments for purchases in the current budget period. Direct materials budget in our example includes such a schedule of expected cash disbursements. Ordinarily, companies do not immediately pay their suppliers. At Hampton Freeze Inc. the policy is to pay for 50% of purchases in the quarter in which the purchase is made and 50% in the following quarter, so while the company intends to purchase $47,400 worth of sugar in the first quarter, the company will only pay for half, $23,700, in the first quarter and the other half will be paid in the second quarter.

Cash Budget | Cash Budgeting

Cash Budget | Cash Budgeting: Learning Objectives: Define and explain a cash budget. What is the purpose of a cash budget How to prepare a cash budget. Definition and Explanation: Cash budget is a detailed plan showing how cash resources will be acquired and