If a Firm Determines It Can Use the Percentage-Of-Sales Method

question 6

Multiple Choice

If a firm determines it can use the percentage-of-sales method and it follows the procedure described in the textbook, then the net result is that each expense item on its income statement (with the exception of those items that can be individually forecast) will grow at the same rate as sales. This approach is called the ________.

• A) continuous percentage method of forecasting
• B) stable fraction method of forecasting
• C) regular proportion method of forecasting
• D) constant ratio method of forecasting
• E) steady percentage method of forecasting

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Definitions:

Cochlea

A spiral-shaped cavity in the inner ear that is essential for hearing, containing the organ of Corti, which translates sound vibrations into nerve impulses.

Cone Photoreceptors

Specialized types of photoreceptor cells in the retina of the eye that function in color vision and day light.

Tunics

Layers or coats surrounding certain organs or tissues, notably in the eyes and the blood vessels.

Oblong

Having an elongated shape, typically rectangular but with the length considerably greater than the width.