Net Earnings Before Deducting Minority Share of Earnings Is Utilized

question 36

Multiple Choice

Net earnings before deducting minority share of earnings is utilized in the following ratios, since noncontrolling interests are included in the base.Which ratio is an exception to this statement?

• A) net profit margin
• B) return on assets
• C) return on equity
• D) return on investment
• E) none of the answers are correct

Explain the concept of voidable contracts and the conditions under which a contract may be considered voidable.

Recognize and evaluate the legal implications of acting with scienter (knowledge of the falsehood), including in the context of fraudulent misrepresentation.

Understand the ethical and legal considerations in professional conduct, particularly relating to the legal profession.

Assess the role and importance of disclosure in contractual agreements.

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Definitions:

Cost of Goods Sold

The total cost of all raw materials, labor, and overhead expenses incurred to produced goods that were sold during a particular period.

Perpetual Inventory System

An accounting method that continuously updates inventory records for purchases and sales in real-time.

Periodic System

The periodic system is an inventory accounting system where updates to inventory levels are made on a periodic basis, such as monthly or yearly, rather than continuously updating with each sale or purchase.

Average Cost Method

An inventory costing method in which all goods are assigned a price based on the average cost of all units purchased, factoring in all inventory acquired.