Which Financial Statement Must Be Prepared Before the Others

question 19

Multiple Choice

Which financial statement must be prepared before the others?

• A)Statement of Cash Flows
• B)Income Statement
• C)Balance Sheet
• D)Statement of Retained Earnings

---

Definitions:

Cash Burn

The rate at which a company spends its cash reserves, especially in the context of startups or new ventures.

Monthly Cash Expenses

The total amount of money spent by a business within a month for operational activities, excluding non-cash expenses.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value due to changes in interest rates.

Cash Equivalents

Short-term, highly liquid investments that are easily convertible into a known amount of cash.