What Information Does the Sales Budget Provide for Pro Forma

question 12

Multiple Choice

What information does the sales budget provide for pro forma financial statements?

• A) Total budgeted sales to be used on the pro forma income statement
• B) Cash collections from customers to be used on the pro forma balance sheet
• C) The ending balance in accounts payable, which appears on the pro forma balance sheet
• D) All of the answers are correct.

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Definitions:

Equilibrium Price

The price at which the quantity of a good supplied is equal to the quantity demanded, leading to a stable market condition.

Quantity Demanded

The aggregate quantity of a product or service that buyers are prepared and capable of buying at a given price.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specific period.

Economic Efficiency

A scenario in which the allocation of resources is aimed at maximizing the creation of goods and services.