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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Why do firms like to calculate a percentage column on the income statement (in which each line item is expressed as a percentage of sales)?

To determine

State the purpose of having percentage column in the income statement.

Explanation

Income Statement:

The statement that shows revenue and expenses incurred over a period of time (usually one year) is called an income statement. It is used for external financial reporting as it helps the outsiders and investors in evaluating the firm’s financial health.

The percentage column in the income statement helps the company to identify those costs which are relatively high...

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