The reasonableness and feasibility of short-term cash forecasts can be evaluated by preparing:
A)bank reconciliation statements.
B)pro forma financial statements.
C)responsibility reports.
D)interest coverage computations.

Question

Quizplus · Accepted Answer

Pro forma financial statements provide a projection of future financial performance based on historical data and assumptions. By preparing a short-term cash forecast as a pro forma statement, the reasonableness and feasibility of the forecast can be evaluated. Bank reconciliation statements are used to identify discrepancies between a company's records and bank statements, responsibility reports focus on individual performance and accountability, and interest coverage computations analyze a company's ability to pay interest expenses.

The Reasonableness and Feasibility of Short-Term Cash Forecasts Can Be