A cash flow summary is best described as:

A cash flow summary is best described as:

• A. The actual result of money transactions. It can be helpful when developing a cash flow projection if the enterprise combinations will be the same as the previous years
• B. A Forecast of Future Profits
• C. A List of Current Assets and Liabilities
• D. A Record of Tax Liabilities

Answer: (A)

A cash flow summary records the actual cash receipts and payments during a period, showing how cash changed hands. It’s a historical view of cash movement, not a forecast of profits. It can be useful when building a cash flow projection if the business’s mix of activities and the timing of cash flows are similar to previous years, because past cash patterns provide a guide for future expectations. It isn’t a listing of current assets and liabilities (that’s a balance sheet) nor a record of tax liabilities.

A cash flow summary records the actual cash receipts and payments during a period, showing how cash changed hands. It’s a historical view of cash movement, not a forecast of profits. It can be useful when building a cash flow projection if the business’s mix of activities and the timing of cash flows are similar to previous years, because past cash patterns provide a guide for future expectations. It isn’t a listing of current assets and liabilities (that’s a balance sheet) nor a record of tax liabilities.