If the Following Facts Were Known, Which One Would Strengthen

question 138

Short Answer

If the following facts were known, which one would strengthen the argument that a company is profitable?
The company's sales revenue is low relative to its cost of goods sold.
The company's cost of goods sold is low relative to its sales revenue.
The number of customers has remained stable for some time.
The company has had the same owners over its lifetime.
The company's selling expenses are high compared to its administrative expenses.

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Definitions:

Debit Balances

Financial account balances resulting from total debits exceeding total credits, common in asset and expense accounts.

Credit Balances

Amounts of money in financial accounts that indicates the institution owes the account holder; in accounting, it can indicate a surplus in a particular account.

Ledger

A comprehensive collection of all accounts and transactions for a company, used in the double-entry bookkeeping system.

Overpayment Error

An overpayment error occurs when more money is paid than is actually owed, requiring adjustment or refund.