Projected financial statements are less reliable than historic financial statements due to the use of:
A) projected costs.
B) direct costs.
C) actual costs.
D) variable costs.

Question

Quizplus · Accepted Answer

Projected financial statements rely on estimates and assumptions about future events and outcomes, including projected costs. Actual costs are not yet incurred, and direct or variable costs may change based on future events and circumstances. Therefore, projected financial statements are generally less reliable than historic financial statements, which are based on actual results and transactions.

Projected Financial Statements Are Less Reliable Than Historic Financial Statements