In Performing a Vertical Analysis the Base for Cost of Goods

question 219

Multiple Choice

In performing a vertical analysis the base for cost of goods sold is

• A) total selling expenses.
• B) net sales.
• C) total revenues.
• D) total expenses.

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Definitions:

Net Income

The net income of a business once all costs, such as operational expenditures and taxes, have been deducted.

Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.

Expense

An outflow of money to another person or entity to pay for an item or service or for a category of costs.

Owner's Capital Account

An equity account on a company's balance sheet representing the owner's invested funds plus the net income minus the withdrawals by the owner.