To ensure that the financial statements articulate,it is important that the change in the cash balance on the balance sheet each year agrees with:
A) the cash collections from sales in the projected income statement.
B) the cash provided by or used by operations on the projected statement of cash flows.
C) the net change in cash on the projected statement of cash flows.
D) the net change in working capital from period to period.

Question

Quizplus · Accepted Answer

The net change in cash on the projected statement of cash flows should directly correspond with the change in cash balance on the balance sheet. This is because the statement of cash flows is designed to show the inflows and outflows of cash during a given period, which will ultimately impact the cash balance on the balance sheet. Therefore, ensuring that these two items agree is crucial for the financial statements to articulate properly. Choices A, B, and D may also impact the cash balance, but they are not directly related to the change in cash balance on the balance sheet.

To Ensure That the Financial Statements Articulate,it Is Important That