The weakness of the judgmental approach to preparing a pro forma balance sheet is
A. the assumption that the values of certain accounts can be forced to take on desired levels.
B. the assumption that the firm faces linear total revenue and total operating cost functions.
C. the assumption that the firm’s past financial condition is an accurate predictor of its future.
D. ease of calculation and preparation.
Answer:A
The weakness of the judgmental approach to preparing a pro forma balance sheet is
A. the assumption that the values of certain accounts can be forced to take on desired levels. B. the assumption that the firm faces linear total revenue and total operating cost functions. C. the assumption that the firm’s past financial condition is an accurate predictor of its future. D. ease of calculation and preparation.