One Ratio Result on Its Own Is Meaningless Unless It

question 21

Multiple Choice

One ratio result on its own is meaningless unless it can be compared to an appropriate yardstick or benchmark.An appropriate benchmark would be

• A)all the options are appropriate benchmarks
• B)industry averages
• C)other entities in the same industry
• D)the entity's ratios over time

Understand the relationship between credit sales, bad debt expense, and the adjustment of allowance for doubtful accounts.

Understand how to prepare journal entries for transactions involving sales, collections, and discounts.

Analyze the effect of transactions on financial statement components.

Define cash equivalents and identify their placement in financial statements.

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Definitions:

Narcissistic Personality Disorder

A disorder marked by a grandiose sense of self-importance, a sense of entitlement, and an excessive need for attention and admiration.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification and diagnostic guide used by mental health professionals.

Diagnostic Criteria

A set of symptoms and signs used to determine the presence of a particular disease or condition.

Bulimia Nervosa

An eating disorder characterized by habitually engaging in out-of-control overeating followed by unhealthy compensatory efforts, such as self-induced vomiting, fasting, abuse of laxatives and diuretics, and excessive exercise.