Which of the Following Statements Is True About the Laspeyres

question 15

Multiple Choice

Which of the following statements is true about the Laspeyres and Paasche indices?

• A) As long as the evaluation period is the same, the two indices usually yield the same value.
• B) The difference in the values of the two indices, if any, can usually account for the varying price levels across periods.
• C) The Laspeyres price index uses the current period quantities as weights, as opposed to the base period quantities used by the Paasche price index.
• D) The greater the length of time between periods, the higher the chances of variation between the values of the two indices.

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Definitions:

Long-term Debt

Financial obligations owed by a company that are due more than one year in the future, typically including bonds, long-term loans, and lease liabilities.

Internal Control

The processes designed to ensure the reliability of financial reporting, effectiveness and efficiency of operations, and compliance with laws and regulations.

Payroll Checks

Payments made to employees for the work they have done, often processed through a company's payroll system.

Current Liabilities

Current liabilities are obligations a company needs to pay off within a year, such as accounts payable, short-term loans, and accrued expenses.