Kershner Says: "Our Income Statement Should Be Looking Good This

question 78

Short Answer

Kershner says: "Our income statement should be looking good this year. We've been doing excellent business this year, so we have a lot of gross sales. The company should be in good shape."
Michaels replies: "It remains to be seen how our income statement will look overall. In spite of strong sales revenue, the overall income statement might not be as good as we might hope."
Which of the following does Michaels assume?
Revenues this year were not as high as last year's.
Revenues are not as high as Kershner thinks they are.
Selling expenses exceeded administrative expenses this year.
Other factors must be taken into account to arrive at an income statement.
Income taxes will be high this year.

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Definitions:

Significance Level

A threshold in hypothesis testing below which an observed effect is considered statistically significant.

Logistic Regression

Logistic regression is a statistical method for analyzing datasets in which there are one or more independent variables that determine an outcome, used especially for predicting binary outcomes.

Odds

A ratio comparing the likelihood of certain events occurring versus them not occurring, often used in gambling and statistics.

Success

The achievement of a set goal or objective, often measured by criteria set by individuals or organizations.