Discuss the Advantages and Disadvantages of Using Executive Judgment in Forecasting

question 110

Essay

Discuss the advantages and disadvantages of using executive judgment in forecasting company sales.

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Definitions:

Initial Value Method

A method of investment accounting where the investment is initially recorded at cost, without subsequent adjustments for changes in fair value.

Equity Income

Income earned from investments in shares of companies, often received as dividends, indicating profit participation in these companies.

Internal Accounting Records

Documents and ledgers used within an organization to track financial transactions, operational data, and other key financial information.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the investee's net income or losses.