The key initial element in developing pro forma statements is
A) a cash budget.
B) an income statement.
C) a sales forecast.
D) a collections schedule.

Question

Quizplus · Accepted Answer

The key initial element in developing pro forma statements is usually a sales forecast. This forecast is important since it impacts all other financial statements, including the income statement, cash budget, and balance sheet. A sales forecast helps a business estimate future revenue, which then helps determine expenses and profits. Without a sales forecast, it is difficult to create accurate pro forma statements.

The Key Initial Element in Developing Pro Forma Statements Is