The Weakness of the Judgmental Approach to Preparing a Pro

question 12

Multiple Choice

The weakness of the judgmental approach to preparing a pro forma balance sheet is ________.

• A) the assumption that the values of certain accounts can be forced to take on desired levels
• B) the assumption that the firm faces linear total revenue and total operating cost functions
• C) the assumption that the firm's past financial condition is an accurate predictor of its future
• D) ease of calculation and preparation

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Definitions:

Moderate Amount

A moderate amount indicates a quantity that is not too large nor too small but within a reasonable or acceptable range.

Seery et al., 2013

A reference to a specific study or publication by researchers Seery and colleagues in the year 2013, possibly pertaining to psychology or another scientific field.

Delinquent Behavior

Actions that violate societal norms or laws, often committed by juveniles or young adults.

Socioeconomic Status

An individual's or family's economic and social position in relation to others, based on income, education, and occupation.