1. The following are all true about the percent of sales method: - It is one shortcut that can be used to bypass the pro-forma process - It assumes that balance sheet items will maintain a given relationship to sales. - It can be used to analyze various aspects of an income statement (or P&L) to sales. True False
2. The pro-forma process starts out with a sales projection, which is used to create a pro-forma income statement, which then (combined with cash budgets/statements and a prior balance sheet) is used to come up with a new balance sheet. True False
3. On an accrual basis the generation of sales and profits means that there will be enough cash on hand to meet financial obligations. True False