Which One of the Following Statements Is True Concerning the Construction

question 2

Multiple Choice

Which one of the following statements is true concerning the construction of pro forma statements using the percentage of sales approach?

• A) The profit margin tends to vary considerably.
• B) The dividend dollar amount is held constant.
• C) Long-term debt is held as a constant percentage of sales.
• D) Retained earnings vary directly with sales.
• E) Inventory generally varies directly with sales.

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Definitions:

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of time without exposure to the conditioning stimulus.

Primary Reinforcer

An innately reinforcing stimulus, such as food or water, that satisfies a biological need.

Secondary Reinforcer

A stimulus that gains its reinforcing power through association with a primary reinforcer.

Latent Learning

Learning that occurs without apparent reinforcement, but is not demonstrated until a motivation is present.