Which of the Following Is Not an Important Reason for Preparing

question 12

Multiple Choice

Which of the following is not an important reason for preparing a business plan?

• A)To persuade investors to invest in your company
• B)To obtain financing from a bank
• C)To use as a yardstick by which you can measure your business' performance
• D)All of the above are reasons for preparing a business plan

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Definitions:

Direct Method

A way of preparing the cash flow statement where actual cash flows from operating activities are reported.

Income Taxes Payable

This liability account shows the amount of income taxes owed to the government but not yet paid by a company.

Cash Payments

Outflows of cash from a company to settle obligations, including the payment of goods, services, and debts.

Operating Activities

Part of a company’s cash flow statement that shows the cash inflows and outflows related to its core business operations.