Some European Companies Do Not Report Cost of Goods Sold

question 52

Multiple Choice

Some European companies do not report cost of goods sold as a separate expense item.What affect does this have on financial statement analysis?

• A)It would not be possible to determine the company's total expenses.
• B)Any measure that relies on knowing gross profit cannot be calculated.
• C)Net income cannot be accurately calculated.
• D)There is inadequate aggregation of financial information.

---

Definitions:

Orange Juice

A commodity traded on futures markets, representing frozen concentrated orange juice.

Futures Contracts

Legal agreements to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Standardized

Made uniform in format and structure, facilitating comparison and assessment across different instances or entities.

Forward Contracts

A non-standardized agreement between two parties to buy or sell an asset at a specified future time at a price agreed upon today.