What information does the sales budget provide for pro forma financial statements?
A) Total budgeted sales to be used on the pro forma income statement
B) Cash collections from customers to be used on the pro forma balance sheet
C) The ending balance in accounts payable, which appears on the pro forma balance sheet
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

The sales budget provides information on the total budgeted sales, which is necessary for preparing the pro forma income statement.

Answer: B
 The sales budget provides information on cash collections from customers, which is necessary for preparing the pro forma balance sheet.

Answer: C
 The sales budget does not provide information on accounts payable, which appears on the pro forma balance sheet. Therefore, this answer is incorrect.

Answer: A and B
 The sales budget provides information on both total budgeted sales and cash collections from customers, which are necessary for preparing the pro forma income statement and pro forma balance sheet, respectively. This answer is correct.

What Information Does the Sales Budget Provide for Pro Forma