When Does a Business Have to Increase Its Sales Annually

question 28

Multiple Choice

When does a business have to increase its sales annually to net as much as it did in the previous year?

• A) when profits are rising as fast as sales
• B) when profits are not rising as fast as sales
• C) when sales are trending upward
• D) both a and c

Identify the types and purposes of adjusting entries in accounting (accrued revenues, accrued expenses, deferred revenues, prepaid expenses).

Recognize the principles of revenue recognition and expense matching as they relate to the preparation of financial statements.

Distinguish between the concepts of cash and accrual basis of accounting.

Explain the process and significance of preparing an adjusted trial balance.

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Definitions:

Performance Evaluation

The process of assessing the performance of an employee, a department, or an organization against set objectives or criteria.

Profit Centers

Divisions or departments within an organization that are responsible for generating its income.

Management Performance Report

A document that evaluates and summarizes the effectiveness and efficiency of a company's management in achieving corporate objectives.

Controllable Fixed Costs

Fixed costs that management has the authority to increase or decrease, such as advertising expenses or research and development costs.