MB 310 EXAM 2 QUESTIONS WITH VERIFIED
ACCURATE SOLUTION 2026
When determining the projected quantity of unit sales for the next six months which of
the following are used in this process?
All of these are correct
Projected sales
Beginning inventory − Desired ending inventory
Production requirements - Answers -All of these are correct
The key initial element in developing all pro forma statements is...
a cash budget.
a collections schedule.
an income statement.
a sales forecast. - Answers -a sales forecast.
In a cash budget, the cumulative cash balance is equal to
net cash flow minus the beginning cash balance.
net cash flow plus the beginning cash balance.
the cumulative loan balance plus the ending cash balance.
the cumulative loan balance minus the ending cash balance. - Answers -net cash flow
plus the beginning cash balance.
Net cash flow is equal to:
cash receipts minus cash payments minus depreciation.
income after taxes minus depreciation.
income after taxes minus dividends.
cash receipts minus cash payments. - Answers -cash receipts minus cash payments.
Pro forma financial statements are:
projections of financial statements for a future period.
All of the options are true.
the most comprehensive means of financial forecasting.
often required by prospective creditors. - Answers -All of the options are true.
In using a systems approach to financial planning, it is necessary to develop a:
All of the options are true.
production plan.
, pro forma income statement.
cash budget. - Answers -All of the options are true.
T/F: A pro forma balance sheet needs data from the prior balance sheet, pro forma
income statement, and cash flow in order for it to be complete. - Answers -True
T/F: Pro forma income statements and balance sheets refer to projected financial
statements. - Answers -True
T/F: The percent-of-sales method for financial forecasting assumes that balance sheet
accounts maintain a relatively constant relationship to sales. - Answers -True
T/F: Profit is generally adequate to finance significant growth. - Answers -False
In order to estimate production requirements, we...
subtract projected sales in units from desired ending inventory and add beginning
inventory.
add projected sales in units to desired ending inventory and subtract beginning
inventory.
add beginning inventory to desired ending inventory and divide by two.
add beginning inventory to desired ending inventory and subtract projected sales in
units. - Answers -add projected sales in units to desired ending inventory and subtract
beginning inventory
In calculating gross profits, a firm utilizing FIFO inventory accounting would assume
that...
all sales were for cash.
all sales were from the current production.
all sales were from the beginning inventory.
sales were from the beginning inventory until it was depleted, and then sales were from
the current production. - Answers -sales were from the beginning inventory until it was
depleted, and then sales were from the current production.
The percent-of-sales method of financial forecasting...
is more detailed than a cash budget approach.
provides a month-to-month breakdown of data.
requires more time than a cash budget approach.
assumes that balance sheet accounts maintain a constant relationship to sales. -
Answers -assumes that balance sheet accounts maintain a constant relationship to
sales.
ACCURATE SOLUTION 2026
When determining the projected quantity of unit sales for the next six months which of
the following are used in this process?
All of these are correct
Projected sales
Beginning inventory − Desired ending inventory
Production requirements - Answers -All of these are correct
The key initial element in developing all pro forma statements is...
a cash budget.
a collections schedule.
an income statement.
a sales forecast. - Answers -a sales forecast.
In a cash budget, the cumulative cash balance is equal to
net cash flow minus the beginning cash balance.
net cash flow plus the beginning cash balance.
the cumulative loan balance plus the ending cash balance.
the cumulative loan balance minus the ending cash balance. - Answers -net cash flow
plus the beginning cash balance.
Net cash flow is equal to:
cash receipts minus cash payments minus depreciation.
income after taxes minus depreciation.
income after taxes minus dividends.
cash receipts minus cash payments. - Answers -cash receipts minus cash payments.
Pro forma financial statements are:
projections of financial statements for a future period.
All of the options are true.
the most comprehensive means of financial forecasting.
often required by prospective creditors. - Answers -All of the options are true.
In using a systems approach to financial planning, it is necessary to develop a:
All of the options are true.
production plan.
, pro forma income statement.
cash budget. - Answers -All of the options are true.
T/F: A pro forma balance sheet needs data from the prior balance sheet, pro forma
income statement, and cash flow in order for it to be complete. - Answers -True
T/F: Pro forma income statements and balance sheets refer to projected financial
statements. - Answers -True
T/F: The percent-of-sales method for financial forecasting assumes that balance sheet
accounts maintain a relatively constant relationship to sales. - Answers -True
T/F: Profit is generally adequate to finance significant growth. - Answers -False
In order to estimate production requirements, we...
subtract projected sales in units from desired ending inventory and add beginning
inventory.
add projected sales in units to desired ending inventory and subtract beginning
inventory.
add beginning inventory to desired ending inventory and divide by two.
add beginning inventory to desired ending inventory and subtract projected sales in
units. - Answers -add projected sales in units to desired ending inventory and subtract
beginning inventory
In calculating gross profits, a firm utilizing FIFO inventory accounting would assume
that...
all sales were for cash.
all sales were from the current production.
all sales were from the beginning inventory.
sales were from the beginning inventory until it was depleted, and then sales were from
the current production. - Answers -sales were from the beginning inventory until it was
depleted, and then sales were from the current production.
The percent-of-sales method of financial forecasting...
is more detailed than a cash budget approach.
provides a month-to-month breakdown of data.
requires more time than a cash budget approach.
assumes that balance sheet accounts maintain a constant relationship to sales. -
Answers -assumes that balance sheet accounts maintain a constant relationship to
sales.
