What Is the First Step in Preparing Pro Forma Financial

question 133

Multiple Choice

What is the first step in preparing pro forma financial statements?

• A)Project operating revenues.
• B)Project operating expenses other than the cost of financing and income taxes.
• C)Project the assets required to support the level of projected operating activity.
• D)Project the financing (liabilities and contributed capital) required to fund the level of assets.
• E)Project the cost of financing the debt, income tax expense, net income, dividends, and the change in retained earnings.

---

Definitions:

Personal Prejudices

Biases or preconceived opinions that individuals hold, which affect their attitudes, actions, and perceptions about other people or situations.

Continuous Employment

A work situation where an individual is employed continuously without significant breaks or interruptions.

Relocation

Refers to the process of moving to a different place, often for work or living purposes.

Long Working Hours

Extended periods of work time that surpass the standard full-time hours, often associated with increased stress and health risks.