What is the first step in preparing pro forma financial statements?
A)Project operating revenues.
B)Project operating expenses other than the cost of financing and income taxes.
C)Project the assets required to support the level of projected operating activity.
D)Project the financing (liabilities and contributed capital) required to fund the level of assets.
E)Project the cost of financing the debt, income tax expense, net income, dividends, and the change in retained earnings.

Question

Quizplus · Accepted Answer

The first step in preparing pro forma financial statements is to project operating revenues. This allows the company to estimate its potential revenue streams and plan accordingly for future expenses, assets, and financing.

What Is the First Step in Preparing Pro Forma Financial