All of the following are true regarding projected financial statements except:
A) The statement of cash flows is the most critical forecast since it reflects profitability rather than viability.
B) Preparing projected financial statements must incorporate a company's past performance records.
C) Preparing projected financial statements must incorporate a company's current performance records.
D) The income statement demonstrates immediate capability to service debt for banks or real potential for growth in returns for venture capital.

Question

Quizplus · Accepted Answer

The statement of cash flows primarily reflects a company's viability, as it shows the incoming and outgoing cash flows. The income statement provides information on profitability, and the balance sheet gives information on the financial position of the company. Therefore, statement A is not true.

All of the Following Are True Regarding Projected Financial Statements