2. Monitoring and Controlling

Question 1

Cash Flow Statement

Answer 1

• maintain liquidity
• summarises cash transactions over a period of time

purpose: provide information about the flow of receipts
and payments

allows business to monitor and control spending

Question 2

Income Statement

Answer 2

• summarises income and expenses
• can monitor progress of the financial and business plan
• can establish trends and make comparisons

purpose: to assess if business is meeting its financial
goals

Question 3

Balance Sheet

Answer 3

• gives a snapshot summary of what the business owes
  and owners at a particular date
• analysed to determine financial stability

purpose: to see if the business is meeting financial
objectives