La Paz Company Reported the Following Data: Which of the Following

question 26

Multiple Choice

La Paz Company reported the following data: Which of the following statements is an accurate conclusion about the 2014 results, based on the above data?

• A)Revenues fell and expenses rose over the 2-year period, resulting in a drop in net income.
• B)Net income improved, despite a rise in operating expenses.
• C)Gross profit declined over two years, resulting in a drop in net income.
• D)The increase in net income resulted primarily from an increase in gross profit coupled with a decrease in operating expenses.

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Definitions:

Compounded Semi-annually

The calculation of interest on the initial investment plus any accumulated interest from previous periods, done twice a year.

Retirement Fund

A pool of funds accumulated during an individual's working life, intended to provide financial security upon retirement.

Invest

To allocate money in the expectation of some benefit in the future, such as income or profit.

Compounded Semi-annually

A method where interest is calculated and added to the principal twice a year.