Which of the statements below is FALSE?
A)We use the prior year's financial statements to find the relationship or relative percentage of each line (accounting category)to either the sales revenue or the total assets of the firm.
B)Forecasted accounting statements are called pro formas for short.
C)We use the projected sales for the past year as the starting point for all the income statement lines.
D)Forecasted accounting statements are called pro forma financial statements.

Question

Quizplus · Accepted Answer

We do not use the projected sales for the past year, but rather the sales projection for the upcoming year as the starting point for all income statements lines. Therefore, statement C is false. Statements A, B, and D are true.

Which of the Statements Below Is FALSE