Oglethorpe Company Reports the Following Information from the Vertical Analysis

question 24

Multiple Choice

Oglethorpe Company reports the following information from the vertical analysis of their income statement: Which of the following statements could be logically concluded from the above data?

• A)The company made a higher gross profit in 2014 than in 2013.
• B)The company made higher net income in 2014 than in 2013.
• C)The company has improved the profit they make per dollar of sales in 2014.
• D)The company's total net income increased by 0.3% in 2014.

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Definitions:

Nominal Accounts

Accounts that are closed at the end of each accounting period, including revenue, expense, and withdrawal accounts.

Temporary Accounts

Accounts used to track transactions in a single accounting period, which are closed and transferred to permanent accounts at the end of the period.

Income Summary

An account used in the closing process that summarizes the revenue and expenses of an accounting period to determine the net income or loss.

Capital Account

An account showing the net worth of a business at a specific point, calculated as assets minus liabilities and preferred stock.