1 - On a common-sized income statement, 100% is the a.net income b.net cost of g

ID: 2537363 • Letter: 1

Question

1 - On a common-sized income statement, 100% is the

a.net income

b.net cost of goods sold

c.sales

d.gross profit

2- The numerator of the return on total assets is

a.net income plus tax expense

b.net income plus interest expense

c.net income

d.net income minus preferred dividends

The purpose of an audit is to

a.determine whether or not a company is a good investment

b.determine whether or not a company complies with corporate social responsibility

c.determine whether or not a company is a good credit risk

d.render an opinion on the fairness of the statements

The price-earnings ratio on common stock is calculated as

a.earnings per share of common stock, divided by market price per share of common stock

b.dividends per share of common stock, divided by earnings per share on common stock

c.market price per share of common stock, divided by earnings per share on common stock

d.market price per share of common stock, divided by dividends per share of common stock

1) Correct choice Sales , Common size statements are expressed as a % of sales and hence sales is allocated 100% by default

2) Numerator of ROA is net income

3) Purpose of audit is to render an opinion on the fairness of statements

4) Price earning ratio is calculated as market price per share of coo=mmon stock divided by earnings per share on common stock

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.