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

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Definitions:

Value Rationality

A type of action motivated by beliefs in the inherent value of certain ethical, aesthetic, or religious convictions, irrespective of potential outcomes.

Collective Action

A process where individuals come together to achieve a common objective, often overcoming personal self-interest for the good of the community.

Ideal Type

A conceptual model used in sociology that describes a pure form of a given social phenomenon, serving as a standard against which real phenomena can be compared.

General Sociological

Relating to the broad, overarching study of social behavior, structures, and functions within a society.