In the next planning period, a firm plans to change its policy of all cash sales and initiate a credit policy requiring payment within 30 days. The statements that will be directly affected immediately are the
A) pro forma balance sheet and cash budget.
B) pro forma income statement and pro forma balance sheet.
C) cash budget and statement of retained earnings.
D) pro forma income statement, pro forma balance sheet, and cash budget.

Question

Quizplus · Accepted Answer

The cash budget will be affected as the timing of cash inflows changes due to credit sales. The pro forma balance sheet will be affected as accounts receivable will increase.

In the Next Planning Period, a Firm Plans to Change