The Following Is a Summary of Information Presented on the Financial

question 47

Multiple Choice

The following is a summary of information presented on the financial statements of a company on December 31,2019. $$\begin{array} { | l | r | r | } \hline { \text { Account } } & { \mathbf { 2 0 1 9 } } & { \mathbf { 2 0 1 8 } } \\\hline \text { Net Sales Revenue } & \$ 601,000 & \$ 503,000 \\\hline \text { Cost of Goods Sold } & 457,000 & \underline { 406,000 } \\\hline \text { Gross Profit } & 144,000 & 97,000 \\\hline \text { Selling Expenses } & \underline { 53,000 } & \underline { 55,000 } \\\hline \text { Net Income Before Income Tax Expense } & 91,000 & 42,000 \\\hline \text { Income Tax Expense } & \underline { 42,000 } & \underline { 20,000 } \\\hline \text { Net Income } & \$ 49,000 & \$ 22,000 \\\hline\end{array}$$ With respect to net sales revenue,a horizontal analysis reveals ________.

• A) a 19.48% increase in net sales revenue
• B) a 237.77% decrease in net sales revenue
• C) a decrease of $51,000 in net sales revenue
• D) a $51,000 increase in net sales revenue

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Definitions:

Inelastic

Describes a situation where the demand or supply for a good or service is not significantly altered when the price changes.

Bumper Crop

An unusually large agricultural harvest, often leading to excess supply and possibly lower prices.

Price Elastic

A measure of how much the quantity demanded of a good or service changes in response to a change in its price.

Income Inelastic

A situation where the demand for a good does not significantly change with a change in consumer's income.