For a Given Year, an Index Number of Average Prices

question 10

Multiple Choice

For a given year, an index number of average prices (such as the Consumer Price Index) is the ratio of the

• A)price of several goods in the given year to that in the base year.
• B)average price of several goods in the base year to that in the given year.
• C)average price of all goods in the given year to that in the base year.
• D)weighted prices of a typical bundle of goods purchased in a given year to that in the base year.
• E)weighted prices of a typical bundle of goods purchased in the base year to that in the given year.

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Definitions:

Consolidation Adjustment

Adjustments made during the preparation of consolidated financial statements to eliminate the effects of inter-company transactions among entities within a single group.

Contingent Liability

A liability that may occur depending on the outcome of a future event.

Business Combination Valuation Entries

Journal entries made in accounting to record the assets and liabilities at their fair values in a business acquisition.

Dividend Payable

A liability recorded on a company's balance sheet representing the amount of dividends declared by the board of directors but not yet paid to shareholders.