Under the judgmental approach for developing a pro forma balance sheet, the "plug" figure required to bring the statement into balance may be called the ________.
A) cash balance
B) retained earnings
C) external financing required
D) accounts receivable

Question

Quizplus · Accepted Answer

The plug figure required to bring the pro forma balance sheet into balance represents the external financing required or the additional funding needed from external sources to ensure that assets are equal to liabilities and equity. This is typically the result of an imbalance in the projected financial statements due to inaccurate or incomplete assumptions, changes in market conditions or business operations, or other factors that affect the financial performance of the company. Therefore, the correct answer is C - external financing required.

Under the Judgmental Approach for Developing a Pro Forma Balance