The pro forma ________ provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.
A) balance sheet
B) statement of cash flows
C) income statement
D) expense statement
E) statement of owners' equity

Question

Quizplus · Accepted Answer

The pro forma balance sheet is used to project a company's financial position going forward, including its ability to meet short-term liabilities (such as accounts payable) and how its assets and liabilities will evolve over time as it engages in new activities. The other statements listed provide important information on a company's financial performance and cash flows, but do not specifically address the issue of meeting short-term obligations or projecting future changes in a company's financial position.

The Pro Forma ________ Provides a Firm a Sense of How