In Creating Pro Forma Statements, If We Assume That Costs

question 185

Multiple Choice

In creating pro forma statements, if we assume that costs, assets, and short-term debt vary directly with changes in sales, that the payout ratio is fixed, and that the change in long-term debt only
Results from payments made as required on the debt contracts, then the "plug" required for the
Balance sheet to balance will probably be:

• A) Dividends.
• B) Total debt.
• C) Long-term debt.
• D) New equity sales.
• E) Retained earnings.

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Definitions:

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The firm belief in the reliability, truth, ability, or strength of someone or something.

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Distortion Tactics

Strategies or maneuvers used to twist or manipulate information, perceptions, or facts, often to achieve personal or organizational objectives.

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The act of communicating false information with the intent to deceive.