The Main Consideration in Constructing the Pro Forma Income Statement

question 39

True/False

The main consideration in constructing the pro forma income statement is the costs specifically associated with the units sold during the period.

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Definitions:

Cash Dividends

Profits distributed by a company to its shareholders out of the company's current or retained earnings, typically in the form of cash.

Preferred Stock

A class of ownership in a corporation with a specified dividend that is paid before any dividends are paid to common stock holders and typically with no voting rights.

Common Stock

Type of security that signifies ownership in a corporation and represents a claim on part of the company's profits and assets.

Dividends

Disbursements issued by a company to its shareholders, representing a share of the company's earnings distributed to its stockholders.