In a Period of Rising Sales, Utilizing Past Cost and Expense

question 1

Multiple Choice

In a period of rising sales, utilizing past cost and expense ratios (percent-of-sales method) when preparing pro forma financial statements will tend to ________.

• A) overstate costs and overstate profits
• B) overstate costs and understate profits
• C) understate costs and overstate profits
• D) understate costs and understate profits

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Definitions:

Folk Cultures

Traditional practices, customs, and ways of life passed down through generations within small, cohesive communities.

Norms

Established standards of behavior maintained by a society that are considered acceptable and expected among its members.

Cultural Symbols

Objects, figures, or colors that represent specific ideas or concepts within a culture.

National Anthem

A National Anthem is a patriotic musical composition that symbolizes and expresses the history, traditions, and struggles of a country's people.