Preparing a projected statement of cash flows serves as check on the projected income statement and projected balance sheet.

Question

Quizplus · Accepted Answer

The projected statement of cash flows shows the expected inflows and outflows of cash during a specific period, which helps to ensure that the projected income statement and balance sheet are in line with expected cash flows. If there are discrepancies between these statements, it may indicate errors in the projections or potential cash flow problems in the future.

Preparing a Projected Statement of Cash Flows Serves as Check