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

Question

Quizplus · Accepted Answer

A sales forecast is the key initial element in developing all pro forma statements because it provides an estimate of future sales or revenue, which is necessary for creating projections for other financial statements like the income statement, cash flow statement, and balance sheet. Without a sales forecast, it would be difficult to estimate the other financial projections accurately.

The Key Initial Element in Developing All Pro Forma Statements