I If the Sales, Production or Other Data Over a Period

question 147

Multiple Choice

i. If the sales, production or other data over a period of time tend to approximate a straight-line
Trend, the equation developed by the least squares method cannot be used to forecast sales for a
Future period.
ii. A straight-line trend equation is used to represent the time series when it is believed that the data
Is increasing (or decreasing) by equal amounts, on the average, from one period to another.
iii. If the past data approximates a straight line, the equation used is
= a + bt, where a is the y-
Intercept and b is the slope of the line.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Next Accounting Period

The future timeline or interval for which financial records will be prepared and analyzed, immediately following the current reporting period.

Closing Revenue

Closing Revenue typically refers to the total revenue recognized by a company at the end of a financial period.

Expense Accounts

Categories within financial accounting that track money spent or costs incurred by a company in its operational activities.

Accounting Period

A specific duration of time used for financial reporting purposes, typically a quarter or a year.