Which of the three financial statements an entrepreneur prepares is used to guide the day-to-day operations of the business?

Question

Quizplus · Accepted Answer

The cash flow statement shows the actual inflow and outflow of cash within the business during a specific period of time. This statement is vital for day-to-day operations as it helps the entrepreneur understand how much cash is available for use in the short term, which is important for making decisions related to expenses, investments, and managing cash flow. The income statement and balance sheet are important for the overall financial health and stability of the business, but they do not provide the same level of detail regarding cash flow. Tax returns, while important for compliance, do not guide day-to-day operations.

Which of the Three Financial Statements an Entrepreneur Prepares Is