Explain the computation and the meaning of each of the following:a. Gross margin percentageb. Return on sales
What will be an ideal response?
a. The gross margin percentage is computed by dividing gross margin by net sales. This measurement provides information about the firm's pricing strategy.
b. The return on sales is computed by dividing net income by net sales. This measurement helps the user determine how efficiently the firm is controlling its costs and expenses. The return on sales can be explained as the number of pennies earned on each sales dollar.
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During which of the following phases of the audit are analytical review procedures required by the auditing standards?
a. The planning phase of the audit. b. The final review phase of the audit. c. Both the planning and final review phases of the audit. d. Performance of tests of controls.
Book value per share refers to the
A) net assets represented by one share of a company's stock. B) highest price that investors will pay for a share of stock. C) issue price of the stock, less any market decline since issuance. D) par or stated value of a share of stock.
Which of the following is true about a simple random sampling?
A) The researcher uses his or her judgment to select people who appear to best fit the requirements of the sample. B) Convenience is the key determinant of who participates. C) Respondents help identify other respondents for the sample. D) Every member of the population is included in the sample. E) Each member of the population has an equal chance of being included in the sample.
Perceived risk is
A. the anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes there may be negative consequences. B. the personal, social, and economic significance of the purchase to the consumer. C. the feeling of postpurchase psychological tension or anxiety that consumers may experience when faced with two or more highly attractive alternatives. D. an unmerited fear of being taken advantage of in an exchange situation. E. the degree to which a seller is willing to make an exchange based upon a customer's credit worthiness.