A Question Asked by Stockholders Is, "How Much Gross Profit

question 84

Multiple Choice

A question asked by stockholders is, "How much gross profit did the company make?" What financial statement would have the "gross profit" indicated as a separate line item?

• A) The balance sheet because retained earnings represents gross profits
• B) The statement of cash flows as cash inflows and outflows represents gross profits
• C) The multi-step income statement
• D) The single-step income statement

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Definitions:

Lack of Delivery

Failure to physically transfer a product, item, or document to its recipient or to fulfill a promise or obligation by the agreed-upon date.

Promissory Note

A written promise to pay a specified sum of money to a designated person at either a fixed or determinable future time.

Contributory Negligence

A legal defense that involves the failure of an injured party to be careful enough to ensure personal safety.

Lack of Possession

The absence of physical custody or control over an object, property, or asset that one might legally own or have rights to.