One Manager (Adam)says That the Income Statement Should Be Strong

question 92

Multiple Choice

One manager (Adam) says that the income statement should be strong this year because the company has achieved a high level of sales revenue.Another manager (Eve) says that even with strong sales revenue,the income statement might not look particularly good.If the following facts were known,which one would strengthen Eve's argument?

• A) Gross sales were higher than last year.
• B) In the current year,total operating expenses were high.
• C) There is only one part-time accountant at the company.
• D) There were relatively few sales returns this year.
• E) Outsourcing helped the company reduce administrative salaries by 25 percent.

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