1) The key initial element in developing pro forma statements is 

A.-an income statement.

B.-a sales forecast.

C.-a cash budget.

D.-a collections schedule.

 

 

2) A firm has beginning inventory of 300 units at a cost of $11 each. Production during the period was 650 units at $12 each. If sales were 700 units, what is the cost of goods sold (assume FIFO)? 

A.-$8,000

B.-$7,700

C.-$9,000

D.-$8,100

 

 

3) The difference between total receipts and total payments is referred to as 

A.-beginning cash flow.

B.-net cash flow.

C.-cumulative cash flow.

D.-cash balance.

 

 

4) The concept of operating leverage involves the use of __________ to magnify returns at high levels of operation. 

A.-variable costs

B.-marginal costs

C.-fixed costs

D.-semi-variable costs

 

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