Which document shows the predicted future cash inflows and outflows for a business?

Which document shows the predicted future cash inflows and outflows for a business?

• A. Cash flow forecast
• B. Cash flow statement
• C. Closing balance
• D. Debtors

Answer: (A)

A cash flow forecast focuses on predicting future cash movements. It lays out expected cash inflows and outflows over a future period, helping the business plan for liquidity, anticipate shortages, and decide on financing or timing of spending. A cash flow statement, by contrast, records what actually happened in a past period. A closing balance is simply the cash available at the end of a period, not a projection. Debtors are amounts owed by customers, an asset, not a forecast document. So the document that shows predicted future cash inflows and outflows is the cash flow forecast.

A cash flow forecast focuses on predicting future cash movements. It lays out expected cash inflows and outflows over a future period, helping the business plan for liquidity, anticipate shortages, and decide on financing or timing of spending. A cash flow statement, by contrast, records what actually happened in a past period. A closing balance is simply the cash available at the end of a period, not a projection. Debtors are amounts owed by customers, an asset, not a forecast document. So the document that shows predicted future cash inflows and outflows is the cash flow forecast.