Under Which of the Following Cases May a Percentage Change

question 133

Multiple Choice

Under which of the following cases may a percentage change be computed?

• A) The trend of the balances is decreasing but all balances are positive.
• B) There is no balance in the base year.
• C) There is a positive balance in the base year and a negative balance in the subsequent year.
• D) There is a negative balance in the base year and a positive balance in the subsequent year.

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Definitions:

Bargain Purchase Option

A lease agreement provision allowing the lessee to purchase the leased asset at a price significantly lower than its expected fair market value at the end of the lease term.

Long-term Liability

A long-term liability is a financial obligation of a company that is due beyond one year, such as bonds payable, long-term leases, and pension obligations.

Capital Lease Obligations

Long-term lease agreements that are recorded as assets on a company's balance sheet, effectively treating the lease as a purchase of the asset.

Current Portion

The portion of long-term liabilities that is due to be paid within the next twelve months.