Financial Forecasts Are Almost Impossible to Determine for New Businesses

question 134

True/False

Financial forecasts are almost impossible to determine for new businesses, and therefore omitted from the initial business plan.

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Definitions:

Deferred Tax Liability

A financial obligation recorded on a company's balance sheet that results from a difference in the timing of when income is earned and when it is taxable.

Installment Sales

Revenue recognition method allowing income to be realized at the time of sale but received through regular payments over time.

Contingent Liability

A potential financial obligation that may arise depending on the outcome of a future event.