Given One or More Hypothetical Assumptions, a Responsible Party May

question 34

Multiple Choice

Given one or more hypothetical assumptions, a responsible party may prepare, to the best of its knowledge and belief, an entity's expected financial position, results of operations and changes in cash flows.Such prospective financial statements are known as:

• A)financial projections.
• B)pro-forma financial statements.
• C)financial forecasts.
• D)partial presentations.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period detailing revenues, expenses, profits, and losses.

Comparability

The quality that allows users to analyze and recognize similarities and differences between two or more items of financial information.

Operational Results

The financial outcomes resulting from a company's core business operations.