Use the Partial Income Statement Below to Answer the Following

question 17

Multiple Choice

Use the partial income statement below to answer the following group of questions
$$\begin{array} { l r r r } & \text { Actual } & \text { Budget } & \text { Difference } \\\text { Revenue from Sales } & \$ 65000 & \$ 55000 & 18 \% \\\text { Sales Discounts } & - 5000 & - 2000 & 150 \% \\\text { Net Sales } & 60000 & 53000 & 13 \% \\\text { Advertising } & 4000 & 1000 & 300 \% \\\text { Cost of Goods Sold } & 25000 & 28000 & - 11 \% \\& & & \\\text { Sales Commissions } & 6000 & 3000 & 100 \% \\\text { Other Expenses } & 4000 & 4000 & 0 \% \\\text { Total Expenses } & 39000 & 36000 & 8 \% \\& & & \\\text { Net Income } & \mathbf { 2 1 0 0 0 } & \underline { \mathbf { 1 7 0 0 0 } } & \mathbf { 2 4 }\end{array}$$
-The percentages in the difference section of the statement show that -

• A) cost of goods sold was lower than budgeted but other costs were higher
• B) cost of goods sold was higher than budgeted but other costs were lower
• C) all expenses were reasonable
• D) net income was higher than budgeted because the percent difference for expenses was less than the difference for sales

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Definitions:

Criminally Liable

The legal responsibility for committing a violation of law that is designated as an offense against the state or public, subject to punishment.

Crimes of Partners

Illegal acts committed within the context of a partnership that can implicate both the individual partner and potentially the partnership.

RUPA

The Revised Uniform Partnership Act, which provides a regulatory framework for the operation of partnerships in the United States.

Illegality

Refers to the condition of being against the law or illegal.