Financial ratio, percentage, and trend comparisons can be distorted by all of the following except:
a. aggressive revenue recognition practices.
b. the timing of asset purchases.
c. accounting for similar economic fundamentals in similar fashion.
d. the presence of nonrecurring items among the firms being analyzed.
C
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What criteria must be met to deem an advertisement deceptive or misleading?
What will be an ideal response?
Available capacity planned to exceed capacity required is:
A) infinite capacity. B) alternate capacity. C) safety capacity. D) theoretical capacity.
Changes in capital stock accounts should normally be approved by:
A. The audit committee. B. The president. C. The board of directors. D. The stockholders.
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Adams incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs. Compute the amount of under- or overapplied overhead for the year.
A. $10,000 overapplied. B. $4,800 underapplied. C. $17,200 underapplied. D. $17,200 overapplied. E. $10,000 underapplied.