IMANET CMA Exam - Topic 2 Question 110 Discussion

Actual exam question for IMANET's CMA exam

Question #: 110
Topic #: 2

[All CMA Questions]

The most direct way to prepare a cash budget for a manufacturing firm into include

AProjected sales, credit terms, and net income.

BProjected net income, depreciation, and goodwill amortization.

CProjected purchases, percentages of purchases paid, and net income.

DProjected sales and purchases, percentages of collections, and terms of payments.

Show Suggested Answer

Suggested Answer: D

The most direct way of preparing a cash budget requires incorporation of sales projections and credit terms, collection percentages, estimated purchases and payment terms, and other cash receipts and disbursements. In other words, preparation of the cash budget requires consideration of both inflows and outflows.

by Antonio at Apr 04, 2025, 05:06 AM

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Franklyn

5 months ago

Surprised that people overlook the importance of collections!

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Estrella

5 months ago

I think A is more relevant for cash flow.

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Larue

6 months ago

C seems off, net income isn't directly related to cash budget prep.

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Kristeen

6 months ago

D is the way to go, it makes the most sense!

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Barrie

6 months ago

Definitely D, it covers all the key aspects!

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Jolene

6 months ago

I’m a bit confused about the role of net income in a cash budget. I thought it was more about cash flows, so I’m leaning towards D as well.

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Gerald

7 months ago

I feel like we practiced a question similar to this, and it emphasized projected sales and payment terms. D sounds familiar.

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Dulce

7 months ago

I’m not entirely sure, but I remember something about including purchases in the budget. Could it be C?

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Cherilyn

7 months ago

I think the cash budget should focus on sales and collections, so maybe D is the right choice?

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Hana

7 months ago

I'm a little confused by the wording of the question. Is it asking about the specific line items to include, or the overall approach to preparing a cash budget? I'll need to re-read it carefully.

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Winfred

7 months ago

Okay, I've got this. The most direct way is to include projected sales, credit terms, and net income. That covers the key cash flow drivers for a manufacturing firm.

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Corinne

8 months ago

Hmm, I'm a bit unsure about this one. I'll need to think through the different components of a cash budget and see which one matches the question best.

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Shayne

8 months ago

This seems pretty straightforward. I think the key is to focus on the cash flow aspects, like projected sales, purchases, and payment terms.

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Barb

1 year ago

Option D is the way to prepare a cash budget for a manufacturing firm. It's as simple as that. The other options are like trying to drive a car without wheels.

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Walton

11 months ago

Without a solid cash budget, it can be difficult to make informed financial decisions.

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Stanford

11 months ago

It's important to have a clear understanding of cash flow for a manufacturing firm.

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Phung

11 months ago

Projected sales and purchases, percentages of collections, and terms of payments are key factors to consider.

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Deeann

12 months ago

I agree, option D is definitely the most direct way to prepare a cash budget.

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Pamela

1 year ago

I'm not sure, but C also seems like a good option with projected purchases and net income.

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Eladia

1 year ago

I agree with Brice, D makes sense because it includes sales, purchases, collections, and payments.

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Domitila

1 year ago

Haha, goodwill amortization? Really? That's like trying to bake a cake without flour. Option D is the clear winner here.

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Esteban

11 months ago

It's all about projecting the right numbers for a solid cash budget.

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Lachelle

1 year ago

Projected sales and purchases, percentages of collections, and terms of payments make more sense.

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Dean

1 year ago

Goodwill amortization does seem a bit out of place for a manufacturing firm.

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Stephen

1 year ago

I agree, option D is definitely the most direct way to prepare a cash budget.

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Tasia

1 year ago

I'm with Argelia on this one. Option D covers all the bases. Anything less would be like trying to build a house without a foundation.

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Argelia

1 year ago

D is the way to go! Projected sales and purchases, along with collection and payment terms, are the key components for a cash budget. The other options just don't capture the full picture.

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