You Are Getting Ready to Prepare Pro Forma Statements for Your

question 38

Multiple Choice

You are getting ready to prepare pro forma statements for your business.Which one of the following are you most apt to estimate first as you begin this process?

• A)fixed assets
• B)current expenses
• C)sales forecast
• D)projected net income
• E)external financing need

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Definitions:

Single-Step Statement

A simplified income statement that calculates net income by subtracting total expenses directly from total revenue with one step.

Gross Profit

is the financial gain obtained after subtracting the cost of goods sold (COGS) from total revenue.

Sales Revenues

The income earned by a company from its sales of goods or the provision of services, before any costs or expenses are deducted.