1) __________________ is a situation of declining inflationary pressures that will not impair the purchasing power of dollar.

Select one:

a. Disinflation

b. Deflation

c. Hyperinflation

d. Stagflation

2)

_____________________ is the actual declining of prices affecting everybody from bankruptcies and declining profits

Select one:

a. Stagflation

b. Disinflation

c. Hyperinflation

d. Deflation

3)

One of the Elements of Distortion in Reported Income is _________________________

Select one:

a. reporting of revenues

b. stagnant prices

c. Treatment of recurring items

d. expansionary fiscal policy

4) In order to provide a projection on anticipated profits over subsequent period, the following are all Important steps, except______________

Select one:

a. Establish production revenue streams

b. Determine production schedule, associated use of new material, direct labor, and overhead to arrive at gross profit

c. Compute other expenses

d. Establish sales projection

5) ___________________ are the general and administrative expenses, interest expenses subtracted from gross profit

Select one:

a. Earnings after taxes

b. Aftertax income

c. Earnings before taxes

d. Contribution to retained earnings

6) Pro forma income statements must be translated into cash flows, and they are called __________

Select one:

a. investing activities

b. expensing

c. financing activities

d. cash budgets

7) When constructing a pro forma Balance Sheet, _____________ is/are considered as Current Assets

Select one:

a. notes payable

b. accounts payable

c. inventory

d. plants and equipment

8) When developing a pro forma balance sheet, all of the following must remained unchanged, except_________________

Select one:

a. common stock

b. long-term debt

c. marketable securities

d. retained earnings