In a cash budget, when are transactions recognized?

In a cash budget, transactions are recognized as they occur. This approach allows for real-time tracking of cash flows, ensuring that a facility manager can maintain an accurate picture of the current cash position. Recognizing transactions at the moment they happen enables better planning and management of resources, ensuring that there is enough liquidity to cover immediate expenses and obligations.

This real-time approach is critical for effective financial management, as it provides a clearer understanding of cash inflows and outflows. By monitoring transactions as they occur, managers can make timely decisions, address shortfalls, and optimize cash availability.

The other options reflect different timing perspectives that do not align with standard practices for cash budgeting. Anticipating transactions might help in forecasting but does not provide the immediate clarity needed for managing day-to-day cash flow. Recognizing transactions only at the end of the month or at year-end would lead to potential oversights and a lack of responsiveness to changing cash conditions, which could impact operational effectiveness.