Future Business Leaders of America (FBLA) Agribusiness Practice Test

What type of statement projects business payments and receipts related to a specific business plan?

1. Cash flow report

2. Cash flow statement

3. Income projection

4. Expense statement

The correct answer is: Cash flow statement

The correct response is the cash flow statement, which is specifically designed to project and summarize all business payments and receipts over a defined period related to a specific business plan. This financial document provides insights into the cash generated and consumed by operating, investing, and financing activities. It is essential for assessing the liquidity, solvency, and overall financial health of a business, as it allows stakeholders to understand how money moves in and out of the company, ensuring that sufficient cash is available for ongoing operations and future investments. The cash flow statement is distinct from other financial documents, as it focuses purely on cash movements rather than overall profitability or expenses alone. Other options such as cash flow report, income projection, and expense statement serve different purposes in financial planning and analysis. A cash flow report may include detailed data about cash flows but does not necessarily project them over time like a cash flow statement does. An income projection forecasts expected revenues and profits, while an expense statement details incurred costs but does not provide a comprehensive view of cash movements.