The Following Is a Summary of Information Presented on the Financial

question 149

Multiple Choice

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2014. What would horizontal analysis report with respect to selling and general expenses?

• A)An 11.11% increase in selling and general expenses
• B)That selling and general expenses are 10.00% of net sales revenue
• C)A 10.00% decrease in selling and general expenses
• D)That selling and general expenses are 8.57% of net sales revenue

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Definitions:

Prior Service Cost

Costs recognized when a pension plan initiates or changes, relating to services provided by employees in prior periods.

Net Periodic Pension Expense

The total cost recognized in a particular period related to pension plans, reflecting service cost, interest cost, expected return on plan assets, and other factors.

Unrecognized Past Service Cost

Costs associated with pension plan benefits earned by employees in prior periods not yet reflected in financial statements.

Periodic Pension Expense

The total expense recognized in a period related to an organization’s pension plan.