In Using the Percentage of Sales Forecasting Method, the Assumption

question 29

Multiple Choice

In using the percentage of sales forecasting method, the assumption is that ______________.

• A) there is a direct relationship between long-term debt and sales
• B) inventories will increase proportionately with sales
• C) there is a direct relationship between notes payable and sales
• D) accounts payable will not increase proportionally with sales

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Definitions:

Classified Balance Sheet

A financial statement that groups assets, liabilities, and equity into subcategories, providing detail and clarity to financial positions.

Adjusted Trial Balance

A list of all ledger accounts and their final balances after adjustments have been made, used as the basis for preparing financial statements.

End-Of-Period Spreadsheet

A tool used in accounting to compile all account balances at the period's end, aiding in the preparation of financial statements.

Salaries Expense

The total amount paid to employees for services rendered over a specific period, recorded as an expense in financial accounting.