Which of the following statements is true with regard to the gross profit ratio? An increase in cost of goods sold would increase the gross profit ratio (assuming sales remain constant). An increase in the gross profit ratio may indicate that a company is efficiently managing its inventory. An increase in selling expenses would lower the gross profit ratio. a.1 b.2 c.1 and 2 d.2 and 3

Q: Why do better decisions regarding the purchasing and managing of goods for sale frequently cause…

A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With the…

Q: Holding all other factors constant, indicate whether each of the following changes generally signals…

A: Ratio analysis helps to the analysis the financial statements to understand the clear view on…

Q: A company records inventory at gross invoice price. Theoretically, how should the following affect…

A: Solution: Interest on inventory loan do not affect cost of inventory, it is working capital loan…

Q: Explain whether the following situations, taken independently, would be favorable or unfavorable: (…

A: Favorable is the condition that is positive for a business. This implies that the variance or the…

Q: Compared to using the FIFO method to account for inventory, during periods of risingprices, a…

A: USING OF LIFO METHOD

Q: (a) provide the highest net income? (b) result in the most stable earnings over a number of years?…

A: FIFO: In First-in-First-Out method, items purchased initially are sold first. So, the value of the…

Q: For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount…

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: Assuming that Merchandise business use multiple step income statement. Which of the following will…

A: The financial statement prepared to show the income earned and expenses incurred is known as income…

Q: Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule…

A: The rule of valuing the inventory at cost or net realizable value is also called as Prudence concept…

Q: If the dollar amount in ending accounts payable is greater than the dollar amount in beginning…

A: Solution- Accounts payable are amounts due to vendors or suppliers for goods or services received…

Q: Chapter 4 Profitability and Activity Ratios                     A. Profit Margin Ratio       Net…

A: Net income = 100,680,607 Net sales = 1,870,188,069 Cost of goods sold = 1,245,049,430 Average total…

Q: Sales Returns Which of the following statements is true relating to the allowance for sales returns?…

A: Sales return & allownace :— It is the amount of goods returned by customer due to receive of…

Q: Which of the following is a measure of profitability? Select one: a. Inventory turnover b. Return on…

A: The ratio analysis helps to analyse the financial statements of the business.

Q: Assuming that the price the company pays for inventory is increasing, which method will:

A: The appropriate answer is shown below

Q: Which ratio can provide an indication of the salability of the company's products?

A: Accounting ratios, often known as financial ratios, describe the correlations between the figures on…

Q: The management of Milque Corp. is considering the effects of various inventory-costing methods on…

A: Particulars Inventory price FIFO LIFO Net income Increasing Increases Decreases Ending inventory…

Q: Which of the following is the same as 'net realisable value' of inventory?   a. proceeds of sale…

A: The question is multiple choice question  Required  Choose the Correct Option.

Q: The ratio of Gross profit expressed as a percentage of sales is called: a. Gross Profit Ratio O b.…

A: Sale represents the amount of goods sold by an entity.

Q: Which of the following formula is correct for Gross Margin of a Merchandise Business under…

A:

Q: Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of…

A: Inventory management refers to the valuation of inventory in three ways FIFO, LIFO and weighted…

Q: Which of the following may not result to the amount of cost of sales? a.Net purchases less net…

A: Solution- COGS can be calculated in three steps that culminate in one formula.   Or, to put it…

Q: In a period of rising prices,a. cost of goods sold under LIFO will be less than under FIFO.b. gross…

A:

Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…

A: Step 1    Last in, first-out (LIFO) is inventory method in which the costs of the most recent…

Q: Which of the following will increase the gross profit of the merchandising business? Increase in…

A: Gross profit = Sales - cost of goods sold where, Cost of goods sold = Purchase cost of goods used +…

Q: An increase in the inventory turnover rate is indicative of: Multiple Choice a decrease in the cost…

A: Inventory turnover rate is calculated as ratio of cost of goods sold and inventory

Q: If merchandise inventory is being valued at cost and the purchase price is steadily falling, which…

A: Inventory can be valued using many ways such as : FIFO LIFO Weighted Average Average cost

Q: Sigma Corporation experiences a decrease in sales and cost of goods sold, an increase in accounts…

A: Accounting's goals include keeping a systematic record of all financial transactions in a book of…

Q: The management of Norton Corp. is considering the effects of various inventory-costing methods on…

A: The management of Norton Corp. is considering the effects of various inventory-costing methods on…

Q: During a period when inventory costs are steadily increasing, which of the following is true? O a.…

A: FIFO considers the cost of initial purchases as the cost of goods sold and the later purchases as…

Q: Compared to using the weighted average cost method to account for inventory, during aperiod in which…

A: First-in-First-Out (FIFO):   In First-in-First-Out method, the costs of the initially purchased…

Q: When inventory is sold on account, which of the following is true? Operating cash flows are…

A: When inventory has been sold out , the inventory would be decrease with cost price , account…

Q: he management of Milque Corp. is considering the effects of various inventory-costing methods on its…

A: Introduction:- The following four inventory valuation methods used as follows under:- First-In,…

Q: Which of the following statements are true? A) Common-size balance sheet shows relative value of…

A: Common size statement , also known as component percentage statement is a financial tool for…

Q: Assuming that Merchandise business use simple step income statement. Which of the following will be…

A: THE EQUATION USED IN A SIMPLE STEP INCOME STATEMENT : TOTAL REVENUE = (REVENUE + GAINS) TOTAL…

Q: Cost of goods sold has increased

A: Gross profit refers to the difference between the total sales and the cost of goods sold and net…

Q: Are all the relationships below correct? Sales is equal to Production (no change in inventory) No…

A: "Since you have asked multiple sub part question we will solve the first three sub part question for…

Q: cost of merchandise sold? S What is the term applied to the eXcess of net revenue from sales over…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: a. Income manipulation is difficult under LIFO. b. Accounting principles do not require that the…

A: The right answer is option b. Accounting principles do not require that the inventory cost flow…