Author Question: Which of the following is a limitation of the percent of sales method of preparing pro forma ... (Read 56 times)

a0266361136 · **on:** Jul 10, 2018

Which of the following is a limitation of the percent of sales method of preparing pro forma
financial statements?

A) Inventory levels are seldom affected by changes in sales volume.
B) A firm's investment in accounts receivable is seldom related to sales volume.
C) Not all assets and liabilities increase or decrease as a constant percent of sales.
D) The dividend payout ratio may change from one year to the next.

Question 2

An extremely liquid asset is one that can be sold for cash quickly without a reduction in price
below its current market value.

Indicate whether the statement is true or false