Which of the following is most useful when paying bills and organizing a budget?

• A. A list of company shareholders
• B. A detailed cash flow statement
• C. A summary of fixed asset depreciation
• D. A schedule of inventory turnover

Answer: (B)

Verified step by step guidance

1. Understand the purpose of the question: The goal is to identify which financial document is most useful for paying bills and organizing a budget. This requires knowledge of the function of each option provided.
2. Review the concept of a cash flow statement: A detailed cash flow statement provides information about the inflows and outflows of cash within a business. It is particularly useful for tracking liquidity and ensuring there is enough cash available to meet obligations like paying bills.
3. Analyze the other options: A list of company shareholders is not relevant to budgeting or bill payments, as it pertains to ownership structure. A summary of fixed asset depreciation is useful for accounting purposes but does not directly help with cash management. A schedule of inventory turnover is helpful for operational efficiency but does not address cash flow directly.
4. Determine why a detailed cash flow statement is the correct answer: It allows businesses to monitor their cash position, plan for upcoming expenses, and ensure they have sufficient funds to cover bills and other financial obligations.
5. Conclude that understanding and using a detailed cash flow statement is essential for effective budgeting and bill payment, as it provides the most relevant and actionable financial information for these tasks.