Which of the following statements regarding a multistep income statement is true?
A. A single-step income statement shows sales, gross margin, and net income.
B. When a company sells inventory for more than its cost, the difference between the sales revenue and the cost of goods sold is called the operating income.
C. Gross margin is calculated as sales revenue minus cost of goods sold.
D. Gross margin equals net income.
Answer: C
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Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?
a. The issuance of stock decreases several important financial ratios. b. Issuing bonds dilutes the voting power of the stockholders. c. Corporations are not required to return the investment to the stockholders. d. Investors expect to earn a higher rate of return on stocks than bonds.
What are the steps in conducting cluster analysis (Figure 20.3 in the text)?
What will be an ideal response?
Holding total production in units constant, as the proportion of defective units to total units declines, all of the following measures will be affected, except
a. total unit sales. b. throughput. c. process quality yield. d. process productivity.
A man was injured while riding a mechanical bull owned by an independent contractor at a state fair. He paid to ride the bull and signed a form that he understood the risk of injury. After he was injured, he sued the fair that provided the ride for negligence. You would expect the court held that:
a. the fair was not liable because it did not own the ride; but the owner of the ride could be found liable in strict liability because it knew of the dangers b. the fair was not liable because it did not own the ride; but the owner of the ride could be found liable in negligence because it knew of the dangers c. the fair and the owner of the ride could both be liable in negligence d. the fair was liable in negligence because it had the primary responsibility to its patrons not to provide dangerous amusements in a negligent manner e. none of the other choices