1. Which statement is false regarding financial forecasting?

A. All of the answers are false

B. You need not consider descretionary expenses

C. You do not have to consider captial expenses

D. You can ignore depreciation expense since it does not require cash

2. Which statement regarding forecasting is false?

A. Typically you use the base year as your starting point forecasting

B. If you are only forecasting cash then the cash flow statements are the only one you need to prepare

C. The base year is the year imediately before the first year you are forecasting

D. You should review historical financial statements

3. Which statement is true regarding "how well your forecasted statements match actual results?"

A. You should consider future economic conditions

B. You should monitor or make compariosns each year in order to make necessary adjustments to fture forecasts

C. Rarely are forecasted and actual results the same

D. All statements are true

4. Which type of report would you prepare when engaged to prepare forecasted statements?

A. An audit type report

B. A review type report

C. None of the answers is correct

D. Merely a compilation report

5. Which of the following is considered an essential element to forecasting?

A. All are essential

B. An understanding of the business model

C. Management plans

D.Performance drivers

6. The most important inputs in a financial model are

A. Economic forecast

B. Probabilities

C. The business model

D. Assumptions

8. Which ratio will help with determining accounts receivable balance?

A. Days Sales Outstanding

B. None of these would help

C. Days Inventory Outstanding

D. Days Payable Outstanding