In Order to Prepare a Contribution Format Income Statement,costs Must

question 117

Multiple Choice

In order to prepare a contribution format income statement,costs must be separated into:

• A) manufacturing and selling, general, and administrative costs.
• B) cost of goods sold and operating expenses.
• C) variable and fixed costs.
• D) mixed, variable and fixed costs.

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Definitions:

Liquidity Ratio

A financial metric used to determine a company's ability to pay off its short-term debts with its current assets.

Current Ratio

Current assets/current liabilities. Measures the ability of the firm to pay off its current liabilities by liquidating current assets.

Acid Test

A stringent test that measures the liquidity of a company by calculating its quick assets (excluding inventory) against its current liabilities.

ROA

Return on Assets represents a financial metric that measures a company's profitability in relation to its overall assets.