In a Vertical Analysis of a Statement of Profit or Loss,the

question 13

Multiple Choice

In a vertical analysis of a statement of profit or loss,the 100% figure would be assigned to:

• A) sales.
• B) gross profit.
• C) expenses.
• D) net profit.

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Definitions:

Direct Materials

Divulged as essential components, direct materials primarily encompass tangible substances employed in the fabrication of a product, distinctly identifiable in the final offering.

Materials Requisitions

A document used to request the transfer of materials from a storeroom to a production area.

Controlling Account

The account in the general ledger that summarizes the balances of the accounts in a subsidiary ledger.

General Ledger

The primary ledger, when used in conjunction with subsidiary ledgers, that contains all of the balance sheet and income statement accounts.