The Cresswell Company Updates Its Annual Sales Forecast Every Month

question 46

Multiple Choice

The Cresswell Company updates its annual sales forecast every month as new sales data becomes available. The one-month update is called:

• A) the planning horizon.
• B) the forecast period.
• C) the forecast interval.
• D) the forecasting horizon.

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Definitions:

Fair Value Method

The Fair Value Method is an accounting approach that measures and reports assets and liabilities at their fair value or the price they would receive in a current market transaction.

Compensatory Stock Option Plan

A plan offered by a company to its employees as a form of compensation, which grants them the option to buy the company’s stock at a predetermined price.

Exercise Price

The price at which an option holder can buy (call option) or sell (put option) the underlying security or commodity.