A Statement That Expresses Each Account as a Percentage of Sales

question 274

Multiple Choice

A statement that expresses each account as a percentage of sales is called a:

• A) Common-size statement of financial position.
• B) Common-size statement of comprehensive income.
• C) Common-size statement of cash flows.
• D) Ratio statement of comprehensive income.
• E) Statement of ratio analysis.

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Definitions:

Product Warranty Expense

Costs that a company incurs for repairing, replacing, or servicing products under warranty.

Sales

The total revenue generated from the sale of goods or services by a company during a specified period.

Warranty Obligations

Commitments made by a seller to repair, replace, or refund products that fail within a certain period.

Warranty Expense

Expenses a business faces for the repair or replacement of products covered by warranty.