If total current assets are $140,000 at the end of year 1, increase by $50,000 by the end of year 2, and increase by $50,000 in year 3, the percentage increase over the preceding year is less in year 3 than in year 2.

True

Explanation:

As the assets increase by $50,000 in year 2 on the basis of $140,000

The percentage increase = $50,000/$140,000 = 35.71%

In the year 3, the basis will be $140,000 + $50,000 (increase in year 2) = $190,000

Thus, in the year 3 the percentage increase in assets = $50,000/$190,000 = 26.32%

This clearly shows that the percentage increase is more in Year 2 than year 3, because the increase value is same but the basis has increased for Year 3, which is in denominator.

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