Which of the Following Is a Forecasting Method Used to Project

question 6

Multiple Choice

Which of the following is a forecasting method used to project financial statements?

• A)percent-of-sales method
• B)percent-of-expenses method
• C)return on equity method
• D)additional funds needed method

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Definitions:

Top-Down Managerial Approach

This approach in management involves decision-making and directive processes originating from the upper echelons of the organization hierarchy and flowing downward.

Budget Preparation

The process of estimating future financial performance and resource requirements, forming the basis of a financial plan.

Sales Budget

An estimate of the expected total sales revenue and the necessary selling expenses for a specific period, often broken down by product line or category.

Production Budget

An estimation of the costs associated with the production process, including raw materials, labor, and overhead expenses, for a specific period.