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

question 160

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, if true, would strengthen Michaels's argument?
The company's gross sales went up from the previous year.
Total operating expenses were high in the current year.
The company has only one part-time accountant.
There were few sales returns in the current year.
Offshoring allowed the company to trim administrative salaries by 25 percent.

---

Definitions:

Carnegie Council

An organization focused on promoting ethical leadership and international ethics.

Middle Schools

Educational institutions typically serving students between elementary school and high school, often encompassing grades 6 through 8.

Special Education

Tailored educational programs designed to meet the unique needs of students with disabilities or exceptional learning requirements.

Learning Disabilities

Disabilities involving understanding or using spoken or written language. The difficulty can appear in listening, thinking, reading, writing, spelling, or mathematics. To be classified as a learning disability, the problem must not be primarily the result of visual, hearing, or motor disabilities; intellectual disability; emotional disorders; or environmental, cultural, or economic disadvantage.