In a Common-Size Income Statement, Advertising Expenses Are 10

question 28

Multiple Choice

In a common-size income statement, advertising expenses are 10%. This means that they are 10% of:

• A) net income.
• B) net sales.
• C) gross profit.
• D) net profit.

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Definitions:

Comprehensive Income

Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the United States to prepare and present financial statements in a consistent manner.

Financial Statements

Comprehensive reports that provide information about a company's financial performance and position, including its income statement, balance sheet, statement of cash flows, and statement of shareholder equity.

Other Comprehensive Income

A financial accounting term representing the revenues, expenses, gains, and losses that are not included in net income, affecting the equity section of the balance sheet outside of net income.