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

question 108

Multiple Choice

Which of the following statements about the percent-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:

Failing

The condition or process of not meeting a desirable or intended objective, often used in the context of academic performance or machinery operation.

Probability

The quantification of an event's probability, expressed as a value from 0 to 1, where 0 means the event cannot happen and 1 means it will definitely occur.

Type I Error

The error made by rejecting a true null hypothesis, often referred to as a "false positive."

Type II Error

The error that occurs when a false null hypothesis is not rejected, also known as a "false negative."