A weakness of the percent-of-sales method of preparing a pro forma income statement is ________.
A) that it forecasts income and then expresses the various income statement items as percentages of projected income
B) the assumption that the firm faces linear total revenue and total operating cost functions
C) the assumption that the firm's past financial condition is an accurate predictor of its future
D) the difficulty faced in calculation and preparation of such statements
C) the assumption that the firm's past financial condition is an accurate predictor of its future
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Zero Zone Inc. manufactures and sells display refrigeration and freezer units to supermarkets. The manufacturer is successful because it is able to keep the promises it makes. All customers know that Zero Zone's salespeople and its products live up to all the promises made. Which factor necessary for mutual trust to develop does this illustrate?
A. Profitability B. Dependability C. Spontaneity D. Likability E. Sales orientation
Explain the three marketing metrics that should be incorporated into every company's financial reporting
What will be an ideal response?
Which of the following is a procedure that requests a direct written response to the auditor form a third party?
a. Inquiry b. Confirmation c. Inspection d. Observation
Which of the following is recorded in the cash receipts journal?
A) cash withdrawn by the owner B) cash purchase of equipment C) cash received on customer's account D) adjusting entry for depreciation