Utilizing past cost and expense ratios (percent-of-sales method) when preparing pro forma financial statements will tend to ________
A) understate profits when sales are decreasing
B) understate profits when sales are increasing
C) overstate profits when sales are increasing
D) neither understate nor overstate profits
B
You might also like to view...
Materials in an appendix are not incorporated into the text because
A) they are controversial. B) they include bad news. C) they are not relevant to everyone in the audience. D) they are boring. E) they include multiple categories of information.
Which of the following is not a reason why the auditor needs to take special care to review significant estimates in the financial statements?
a. Organizations may try to use the estimates to "smooth" earnings. b. Organizations may create hidden reserves in unusually good years that can be used in years when real profits do not meet expectations. c. Companies may underestimate liabilities or impairment of asset values to achieve reported earning goals in years when real profits to not meet expectations. d. Companies may try to overestimate liabilities in computing leverage ratios.
Annie Carson, the owner of Annie's Dairy Bar, is considering opening a second location. She evaluates several potential sites by assessing traffic patterns, neighborhood conditions, and the locations of competitors. Annie is engaging in ________
A) observational research B) focus groups C) personal interviews D) Internet-based surveys E) experimental research
The last cultural adaptation stage is characterized by understanding how the culture operates, feeling confident in most situations, and valuing the culture’s differences and similarities to one’s own culture. This stage is called the ______ stage.
A. autonomy B. reintegration C. disintegration D. independence