Which One of the Following Is Correct in Relation to Pro

question 9

Multiple Choice

Which one of the following is correct in relation to pro forma statements?

• A)Fixed assets must increase if sales are projected to increase.
• B)Net working capital is affected only when a firm's sales are expected to exceed the firm's current production capacity.
• C)The addition to retained earnings is equal to net income plus dividends paid.
• D)Long-term debt varies directly with sales when a firm is currently operating at maximum capacity.
• E)Inventory changes are directly proportional to sales changes.

Understand the importance and method of ensuring data integrity and validation in databases.

Recognize the various reports generated by Management Information Systems (MIS) and their uses.

Understand real-time processing and its significance in database management.

Grasp the concept and utility of data mining in uncovering patterns and trends.

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Definitions:

Operating Activities

These are the primary day-to-day activities of a business that relate to its production, sales, and deliveries of its products and services.

Prepaid Insurance

An asset account that represents the amount paid for insurance coverage in advance of the service period.

Depreciation Expense

Depreciation expense is the allocated reduction of the cost of a tangible fixed asset over its useful life, reflecting its wear and tear, or obsolescence.

Net Loss

The amount by which a company's expenses exceed its revenue over a specific period, indicating negative profitability.