In a Period of Rising Sales Utilizing Past Cost and Expense

question 147

Multiple Choice

In a period of rising sales utilizing past cost and expense ratios (percent-of-sales method) , when preparing pro forma financial statements and planning financing, will tend to ________.

• A) understate retained earnings and understate the additional financing needed
• B) overstate retained earnings and overstate the additional financing needed
• C) understate retained earnings and overstate the financing needed
• D) overstate retained earnings and understate the financing needed

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Definitions:

Financial Consultant

A professional who provides expert advice on managing finances, including investment strategies, budgeting, and planning for retirement.

Secondary Control Strategies

Coping mechanisms individuals use to adapt to or minimize stress without changing the actual source of stress.

Primary Control Strategies

Psychological strategies that involve changing the external world to match one's goals and desires.

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