Which of the following is used to predict when a firm will likely experience temporary shortages or surpluses of cash?
A) statement of cash flows
B) statement of projected revenue flows
C) pro forma balance sheet
D) cash budget

Question

Quizplus · Accepted Answer

A cash budget is used to predict when a firm will likely experience temporary shortages or surpluses of cash by forecasting the cash inflows and outflows over a given period of time. The statement of cash flows provides a historical record of cash inflows and outflows and the pro forma balance sheet projects the financial position of the company, but neither of these tools is specifically designed to predict cash shortages or surpluses in the short term. The statement of projected revenue flows is not a commonly used financial statement and is not a recognized tool for forecasting cash flow.

Which of the Following Is Used to Predict When a Firm