Which of the Following Statements Is False Regarding a Company's

question 94

Multiple Choice

Which of the following statements is false regarding a company's budgeted financial statements?

• A) They are used for internal planning purposes.
• B) They are often called pro forma financial statements.
• C) Lending institutions should not use them as a basis for granting a loan.
• D) An error in the preparation of one budget often affects one or more other budgets.

---

Definitions:

Volume Increases

A physical change where the amount of space that a substance or object occupies becomes larger.

Temperature

A measure of the thermal energy of a substance, indicative of how hot or cold the substance is.

Kinetic-Molecular Theory

A theory that explains the properties of gases in terms of the motion of very small particles, considering their collisions as perfectly elastic.

Density

Density is the mass per unit volume of a substance or object, often measured in grams per cubic centimeter or kilograms per cubic meter.