In Doing Vertical Analysis of an Income Statement, You Notice

question 51

Multiple Choice

In doing vertical analysis of an income statement, you notice that cost of goods sold increased from 50% of sales in year 1 to 60% of sales in year 2. All of the following are possible explanations except:

• A) Inventory costs rose faster than sales prices.
• B) Inventory is being stolen.
• C) The accounting records are not accurate.
• D) All of the above are possible explanations.

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Definitions:

Reliability

The degree to which an assessment tool produces stable and consistent results over time.

Public Policies

Governmental laws and programs designed to promote the welfare of children and families.

Child Development

The physical, cognitive, emotional, and social growth that occurs from infancy through adolescence.

Correlated

A statistical relationship between two variables where a change in one is associated with a change in the other.