Your supervisor asks you to compare the company's results for the year, as measured by various ratios, with one of the published surveys that arranges information by industry classification. What difficulties might you encounter when making comparisons using industry standards?
Published financial statements, as well as those often used by management, are based on historical costs and have not been adjusted for inflation. Trend analysis is one type of analysis that must be performed with particular caution if inflation is significant. An increase in sales, for example, may be due to an increase in prices, rather than to an increase in the number of units sold. Inflation affects the various financial statements differently. Some period expenses, such as advertising, are usually not seriously misstated in historical cost terms. However, depreciation based on costs paid for assets that are 30 years old will be much different from depreciation adjusted for the effects of inflation.
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Management executes a plan by overseeing the daily operations of an organization
Indicate whether the statement is true or false
Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $50,000 . Allowance for Uncollectible Accounts has a credit balance of $1,000 . Net sales for the year were $522,000 . In the past, 2 percent of sales have proved uncollectible, and an aging of accounts receivable accounts results in an estimate of $13,500 of
uncollectible accounts. Using the percentage of net sales method, Uncollectible Accounts Expense would be debited for a. $9,440. b. $11,440. c. $1,000. d. $10,440.
Which of the following is true of the behaviorally anchored rating scale?
A. focuses on general statements such as “knowledge of work” B. general examples of performance are provided C. can be time consuming to create and update D. is generally less effective than graphical rating scales
ABC analysis is based upon the principle that:
A) all items in inventory must be monitored very closely. B) there are usually a few critical items, and many items that are less critical. C) an item is critical if its usage is high. D) more time should be spent on class "C" items because there are many more of them. E) as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items.