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Questions and Answers
What is one of the objectives in evaluating the gross profit rate of a business?
What is one of the objectives in evaluating the gross profit rate of a business?
- To determine the net profit margin rate
- To compute the income per peso investment
- To calculate the operating profit margin rate
- To determine whether the amount of gross profit is sufficient to cover operating expenses (correct)
What does the operating profit margin rate indicate?
What does the operating profit margin rate indicate?
- The percentage of income per peso investment
- The percentage of operating expenses to net sales (correct)
- The percentage of gross profit to net sales
- The percentage of net profit to net sales
Why is the government not interested in financial statements?
Why is the government not interested in financial statements?
- Because financial statements are not relevant to the business
- Because it is not a party to any of the transactions of the business (correct)
- Because it is not responsible for preparing financial statements
- Because financial statements are only for internal use
What does the net profit margin rate present?
What does the net profit margin rate present?
What can be determined by computing the net profit margin rate?
What can be determined by computing the net profit margin rate?
Who is primarily responsible for preparing and presenting financial statements?
Who is primarily responsible for preparing and presenting financial statements?
What happens to the average sales of a watch store owner when a 20% discount is offered?
What happens to the average sales of a watch store owner when a 20% discount is offered?
What is the discount percentage given to Michelle for buying 20 jars of strawberry jam?
What is the discount percentage given to Michelle for buying 20 jars of strawberry jam?
What is the primary objective of evaluating financial statements?
What is the primary objective of evaluating financial statements?
What is the result of offering a discount on a particular brand of watch?
What is the result of offering a discount on a particular brand of watch?
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