I When Two or More Series of Index Numbers to Be

question 73

Multiple Choice

i. When two or more series of index numbers to be compared do not have the same base period, we select a common base period for all series. Then we use the respective base numbers as the denominators and convert each base to the new base. ii. Canada pension plan payments and old age security pensions are periodically adjusted based on the Consumer Price Index.
iii. The largest component of the Canadian CPI is Food.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Collection Period

The average number of days it takes for a company to collect payments owed by its customers.

Bad Debts

Money owed to a company that is unlikely to be paid by the debtor, often resulting in a write-off for the company.

Just-In-Time

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

Inventory Systems

are methodologies and procedures used by businesses to track, manage, and plan for current and future inventory and stock levels.