The Statements of Comprehensive Income of LMA Ltd for the Years

question 43

Multiple Choice

The statements of comprehensive income of LMA Ltd for the years ending 31 December reveal the following information: Based on this information, which of the following statements is incorrect?

• A) Profit has increased in Year 3 by 20% over Year 2, 66.7% from Year 1 to Year 2, and 50% from Year 1 to Year 3.
• B) Profit in Year 3 has decreased from Year 2 and Year 1 for each sale made.
• C) The information shows that in Year 2 management was more efficient in creating profits from the sale of goods compared to the other years.
• D) Sales have increased in Year 3 by 33.4% over Year 2, 20% from Year 1 to Year 2, and 60% from Year 1 to Year 3.

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Definitions:

Revenue

The total amount of money received from the sale of goods or services, as well as from related business activities.

Sales

The activity or process of selling products or services in exchange for money; transactions between buyers and sellers.