What Kind of Information Does a Company's Rate of Return

question 83

Multiple Choice

What kind of information does a company's rate of return on net sales provide?

• A) What proportion of each dollar of sales revenue generates net income
• B) What proportion of each dollar of sales revenue generates gross profit
• C) The proportion of sales returns and allowances to gross sales revenue
• D) How effectively a company collects cash on credit sales

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Definitions:

Stated Value

An arbitrary value assigned to no-par value stock by the board of directors of a company, used for accounting purposes.

Date Of Record

The date of record is the specific date set by a company on which the shareholders must be on the company's books in order to receive a declared dividend.

Cash Dividend

The allocation of earnings in cash form by a company to its stockholders.

Retained Earnings Deficit

A negative balance in retained earnings, indicating that a company has more accumulated losses over time than accumulated profits.