Cash flow can be projected in two ways: using the statement of profit and loss to project cash flows or preparing a cash budget.

Question

Quizplus · Accepted Answer

Cash flow can be projected through preparing a cash budget, which outlines expected cash inflows and outflows for a future period of time. The statement of profit and loss only shows revenues and expenses for a specific period, but it does not provide information on when these transactions will result in cash inflows or outflows.

Cash Flow Can Be Projected in Two Ways: Using the Statement