Olivera Company Provides the Following Data for the Year 2013

question 38

Multiple Choice

Olivera Company provides the following data for the year 2013:
$$\begin{array} { l r } \text { Net sales revenue } & \$ 398,000 \\\text { Cost of goods sold } & \$ 255,000 \\\text { Operating expenses } & \$ 95,000 \\\text { Income tax expense } & \$ 9,000\end{array}$$
- On a vertical analysis, what percentage would be shown for net income?

• A) 12.1%
• B) 8.8%
• C) 9.8%
• D) 27.3%

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Definitions:

Functional Currency

The currency of the primary economic environment in which an entity operates and carries out its day-to-day transactions.

Exchange Rate

The value of one currency for the purpose of conversion to another.

Historical Cost

The original monetary value of an asset or transaction, without adjustments for inflation or other factors.

Functional Currency

represents the currency of the primary economic environment in which an entity operates, crucial for financial reporting and determining the entity's financial results and position.