Many Ratios Require an Average Be Used for the Balance

question 64

Multiple Choice

Many ratios require an average be used for the balance sheet numbers because the

• A)income statement refers to a point in time.
• B)accountants may have made errors in the financial statements.
• C)balance sheet numbers are at a point in time and are being compared to an income statement number that covers a period of time.
• D)income statement numbers represent a point in time and are being compared to a balance sheet number that covers a period of time.

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Definitions:

Latent Learning

Learning that occurs without any obvious reinforcement at the time but that is apparent in a later situation.

Drive Reduction

A theory in psychology that explains behavior as driven by the need to reduce internal tensions caused by unmet biological needs.

Incentives Necessary

The concept that motivation or behavior is influenced by a reward or incentive.

Ongoing Behavior

Behavior that is currently in process, continuing over a period of time.