When Predicting Annual Sales Increase, a Good Rule of Thumb

question 34

Multiple Choice

When predicting annual sales increase, a good rule of thumb is:

• A) 0% base then forecast according to strategies
• B) 5% increase over the prior year
• C) 10% increase over the prior year
• D) 15% increase over the prior year

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Definitions:

Straight-Line Depreciation

A strategy for apportioning an asset’s price equally over the duration of its usability.

Fiscal Year-End

The completion of a one-year, or 12-month, accounting period, used by governments and businesses for financial reporting and budgeting, which may or may not align with the calendar year.

Quarter Income Statement

A financial report that summarizes the revenues, expenses, and profits or losses of a company over a three-month period.

Impairment Test

An examination to determine if an asset's carrying value exceeds its recoverable amount, indicating if the asset is impaired.