A Firm Uses 2011 as the Base Year for Its

question 44

Multiple Choice

A firm uses 2011 as the base year for its financial statements.The common-size,base-year statement for 2012 has an inventory value of 1.08.This is interpreted to mean that the 2012 inventory is equal to 108 percent of which one of the following?

• A)2011 inventory
• B)2011 total assets
• C)2012 total assets
• D)2011 inventory expressed as a percent of 2011 total assets
• E)2012 inventory expressed as a percent of 2012 total assets

---

Definitions:

Capital Stock

The total amount of shares that a corporation is authorized to issue, as represented in its financial statements.

Commission Charges

Fees paid for services, usually a percentage of the transaction made or handled by a service provider.

Dollar Amount

The numeric monetary value or cost expressed in terms of dollars.

Capital Stock

The total amount of a company's shares of stock that have been authorized, issued, and purchased by investors, representing ownership in the company.