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 ________.

Question

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The initiation of a credit policy affects the cash budget directly because it changes the timing of cash inflows. It also impacts the pro forma balance sheet due to changes in accounts receivable. However, it does not immediately affect the pro forma income statement or the statement of retained earnings, as these are influenced by sales and expenses over time, not by the timing of cash receipts.

In the Next Planning Period, a Firm Plans to Change