Which of the Following Statements About the Percentage-Of-Sales Method of Financial

question 77

Multiple Choice

Which of the following statements about the percentage-of-sales method of financial forecasting is true?

• A)It is the least commonly used method of financial forecasting.
• B)It is a much more precise method of financial forecasting than a cash budget would be.
• C)It involves estimating the level of an expense, asset or liability for a future period as a percent of the forecast for sales revenues.
• D)It projects all liabilities as a fixed percentage of sales.

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Definitions:

Internal Users

Individuals or groups within an organization who use financial and other information to guide decision-making processes, such as management and employees.

External User

Individuals or entities outside of a company who use its financial information, such as investors, creditors, and regulatory agencies.

Federal Government

The national government of a federal country, which holds the authority to govern matters that affect the country as a whole.

Managerial Accounting

The process of identifying, measuring, analyzing, and interpreting accounting information for internal use by management for planning, decision making, and control.