17. Which of the following is the correct sequence ofevents? A)Performa balance

Question

17. Which of the following is the correct sequence ofevents?

           A)Performa balance sheet, cash budget, proforma income statement.

           B)Proforma balance sheet, proforma income statement, cash budget

           C)Proforma income statement, cash budget, proforma balance sheet

           D)None of the above

18. Which of the following are reasons to generate a proformacash budget on abnormal basis?

           A)A business can monitor the actual cash on hand

           B)Sales are recognized as income when the sale is made

           C)An income statement indicates a profit but the budget may indicatea loss

           D)All of the above

19. Which of the following is a cash payment?

           A)Inventory purchases

           B)Labor costs

           C)Operating expenses

           D)All of the above

Explanation / Answer

17. C. Profofrma Income statement, cash budget and proforma balancesheet. 18. B. Sales are recognized as income when the sale is made . (This is the only one comes to my mind while preparing a cash budgetabnormally.) 19.B. Labor costs. ( Inventory and operating expenses - you couldpay with accounts payable, but for labor you have to pay upfrontwith cash.)

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