(CMA Adapted, Dec 87 #1) When a Balance Sheet Amount

Multiple Choice

(CMA adapted, Dec 87 #1) When a balance sheet amount is related to an income statement amount in computing a ratio,

A) the balance sheet amount should be converted to an average for the year.
B) the income statement amount should be converted to an average for the year.
C) both amounts should be converted to market value.
D) the ratio loses its historical perspective because a beginning-of-the-year amount is combined with an end-of-the-year amount.
E) none of the above.