Question

In: Accounting

16. Operating Profit is the income after subtracting all the expenses from the gross margin (true/false)...

16. Operating Profit is the income after subtracting all the expenses from the gross margin (true/false)

17. Net profit is after subtracting all expenses from the revenue (true/false)

18. An Income statement is a report showing how well the business used its resources over a period of time. (true/false) 19. A debit increases an asset or an expense account (true/false)

20. Depreciation is the allocation of the cost of an asset with a life longer than a year (true/false)

Solutions

Expert Solution

Answer-16)- FALSE- Operating Profit is the income after subtracting all the expenses from the gross margin.

Explanation- Operating Profit is the income after subtracting operating expenses from the gross margin.

Answer-17)- TRUE- Net profit is after subtracting all expenses from the revenue.

Explanation- Net profit= Total revenue – All expenses (Operating & Non-operating expenses)

Answer-18)- FALSE- An Income statement is a report showing how well the business used its resources over a period of time.

Explanation- An income statements or profit & loss account shows the organisation revenues & expenses during the particular period.

Answer-19)- TRUE-A debit increases an asset or an expense account.

Explanation- As per the golden rule of accountancy, debit increase the an asset and an expense account.

Answer-20)- FALSE- Depreciation is the allocation of the cost of an asset with a life longer than a year.

Explanation- Depreciation is the allocation of the cost of an asset over its useful life. The asset’s cost is usually spread over the years in which such assets is used.


Related Solutions

What are net profit, net profit margin,gross profit margin, and operating profit margin? Why are these...
What are net profit, net profit margin,gross profit margin, and operating profit margin? Why are these indicators important in business? Explain the importance of knowing how much profit is generated for each dollar in sales? Give specific examples how knowing these information will be helpful in your business.
True or False? Increasing a company’s net operating profit margin increases both RNOA and ROCE.
True or False? Increasing a company’s net operating profit margin increases both RNOA and ROCE.
Which of the following statements are TRUE or False. (Explain why it’s true or false?) Subtracting...
Which of the following statements are TRUE or False. (Explain why it’s true or false?) Subtracting a positive number from a negative number always gives you a negative number. Subtracting two negative numbers always gives you a negative number. Subtracting a - b is the same as adding a + (-b). A positive number minus a negative number is always a positive number. The difference of a number and its opposite gives you zero. Zero minus a number is the...
For each of the following independent situations, compute the net after-tax cash flow amount by subtracting cash outlays for operating expenses and income taxes from cash revenue.
After-Tax Cash FlowsFor each of the following independent situations, compute the net after-tax cash flow amount by subtracting cash outlays for operating expenses and income taxes from cash revenue. The cash outlay for income taxes is determined by applying the income tax rate to the cash revenue received less the cash and noncash (depreciation) expenses.ABCCash revenue received$94,000$454,000$224,000Cash operating expenses paid58,000319,000149,000Depreciation on tax return16,00034,00024,000Income tax rate40%30%20%Do not use negative signs with any of your answers below.ABCCash revenue$Answer$Answer$AnswerCash outlays:Operating expensesAnswerAnswerAnswerIncome taxesAnswerAnswerAnswerTotal cash...
Gross margin can be found on single step income statement. TRUE              FALSE    GAAP requires companies to disclose...
Gross margin can be found on single step income statement. TRUE              FALSE    GAAP requires companies to disclose the sales returns and allowance on their Income Statement. TRUE              FALSE    
compare between the revenue and margin performance, How have gross margin, operating margin, and net income...
compare between the revenue and margin performance, How have gross margin, operating margin, and net income developed in relation to the fluctuations in revenue? for both companies 1) Auto Wash Bot Ltd. Income Statement For the Year Ended December 31, 2015 Revenue $375,000 Cost of Goods Sold 86,250 Gross Profit 288,750 Other Expenses Advertising 35,400 Office Expense 22,750 Research 195,000 Wages and Salaries 40,000 Total Other Expenses 293,150 Income Before Taxes (4,400) Income Tax 0 Net Income $(4,400) 2) Popeye’s...
Question 1 A) How does the finance concept of gross income and operating expenses differ from...
Question 1 A) How does the finance concept of gross income and operating expenses differ from the accounting concept of gross income and operating expenses. B)Which is the correct definition.
16. To apply the gross margin method, the rate of gross margin on sales is multiplied...
16. To apply the gross margin method, the rate of gross margin on sales is multiplied by __________ __________ to arrive at gross margin. The gross margin is then subtracted from net sales to arrive at __________ __________ __________ __________ __________. This figure is then subtracted from __________ __________ __________ __________ __________ __________ to arrive at ending inventory. 17. Use the following information and the retail inventory method to estimate the ending inventory at cost: Cost Retail Beginning inventory $44,000...
XYZ Company Income Statement Sales $140,000 Cost of Goods Sold 117,000 Gross Profit 23,000 Operating Expenses...
XYZ Company Income Statement Sales $140,000 Cost of Goods Sold 117,000 Gross Profit 23,000 Operating Expenses 12,830 EBIT 10,170 Taxes @39% 2168 Net income 3,392 Dividend 1,018 Addition to Retained Earnings $2,374 XYZ Company Balance Sheet Current Assets Cash $7,500 Accounts Receivable 12,100 Inventory 10,400 Prepaid Items 5,900 Other CA 4,300 Total Current Assets $40,200 Net Plant $ Equipment 82,300 Total Assets $122,500 XYZ Company Balance Sheet Current Liabilities Accounts Payable $7,200 Wages Payable 3,600 Notes payable 5,400 Taxes Payable...
Company Gross Profit Margin Operating Margin Return on Assets Return of Equity Tesla 1.4% 4.9% 1.4%...
Company Gross Profit Margin Operating Margin Return on Assets Return of Equity Tesla 1.4% 4.9% 1.4% 4.19% Toyota 5.41% 6.67% 2.9% 9.49% Industry Standards 1.2% 4.7% 0.8% 4.19% Describe the Equity Valuation in the above chart?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT