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:

Negligent Misrepresentation

Providing false or misleading information carelessly, causing someone to suffer loss or damage.

Innocent Misrepresentation

A type of misrepresentation in legal contexts where the person making the misrepresentation genuinely believes it to be true, lacking intent to deceive.

Unilateral Mistake

A legal term describing a situation where only one party to a contract is mistaken about a basic assumption on which the contract is based.

Innocent Misrepresentation

A false statement made without knowledge of its falsity, not intended to deceive, which can lead to a contract being voided if relied upon by the other party.