Indicate Whether Each of the Following Statements Is True or False.________

question 49

True/False

Indicate whether each of the following statements is true or false.________ a)A common size income statement facilitates comparison between two or more companies of different size and in the same industry.________ b)A common size income statement is prepared by dividing the various amounts reported on the income statement by the amount of total assets.________ c)A common size income statement is helpful in comparing the results of operation in different time periods.________ d)The gross margin percentage is computed by dividing gross margin by net income.________ e)Return on sales is computed by dividing net income by net sales.

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Definitions:

Resale

Resale refers to the action of selling a product or asset to another party after it has been bought, often used in the context of goods bought for the purpose of selling them at a profit.

Straight-Line Method

A technique for calculating depreciation by uniformly distributing the cost of an asset across its lifespan.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset over its useful life until a specific date.

Salvage Value

An asset’s foretold selling price at the finish of its service period.