Pro Forma Financial Statements Are an Accountant's Way of Looking

question 64

True/False

Pro forma financial statements are an accountant's way of looking back to see what "might have been."

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Definitions:

Fixed Costs

Expenses that do not change in total despite fluctuations in the volume of goods or services produced or sold.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, often used to provide more realistic performance comparisons.

Variable Costs

Variable Costs are expenses that vary in direct proportion to changes in the levels of an activity or production volume, such as materials and labor costs.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent and salaries.