Errors in the Sales Forecast Can Be Offset by Similar

question 26

True/False

Errors in the sales forecast can be offset by similar errors in costs and income forecasts Thus, as long as the errors are not large, sales forecast accuracy is not critical to the well being of the firm.

---

Definitions:

Gain On Bargain Purchase

Occurs when a company acquires another company for a price less than the fair market value of its net assets, resulting in a gain on the acquisition balance sheet.

Income Tax Expense

The accounting expense associated with the income taxes a company is obligated to pay to governmental authorities based on its taxable income.

Tax Rate

A percentage at which an individual or corporation is taxed; the tax authority sets it, and it can vary based on income, property value, sales price, etc.

Business Combination

The coming together of separate entities or businesses into one reporting entity via a merger, acquisition, or consolidation.