24.) Using the percentage of sales method of forecasting Select one: a. all asse

ID: 2719811 • Letter: 2

Question

24.) Using the percentage of sales method of forecasting

Select one:

a. all asset and liability accounts increase or decrease proportionally with sales.

b. all balance sheet accounts increase or decrease proportionally with sales.

c. only asset accounts increase or decrease proportionally with sales.

d. accounts payable and accrued expenses are the only liabilities that increase or decrease proportionally with sales.

25.) Which of the following is a limitation of the "percent of sales method" of preparing pro forma financial statements?

Select one:

a. Not all assets and liabilities increase or decrease as a constant percent of sales.

b. A firm's investment in accounts receivable is seldom related to sales volume.

c. The dividend payout ratio may change from one year to the next.

d. Inventory levels are seldom affected by changes in sales volume.

24. d. accounts payable and accrued expenses are the only liabilities that increase or decrease proportionally with sales.

25.a. Not all assets and liabilities increase or decrease as a constant percent of sales.

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