Answered: Fluctuations in unit volume, changes in…

Fluctuations in unit volume, changes in unit price or unit cost of goods sold and modifications in the sales mix of a firm's offerings are all causes for a decrease in which of the following

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A positive price-to-book ratio indicates something is wrong with a company's use of its assets. True…

A: In the world of finance and investing, numerous metrics and ratios are utilized to evaluate the…

Q: Which of the following is not a disadvantage of using the FIFO cost flow assumption? includes all…

A: Lets understand the basics.There are various methods follow to calculate inventory balance. It…

Q: Sales Returns Which of the following statements is true relating to the allowance for sales returns?…

A: Sales return & allownace :— It is the amount of goods returned by customer due to receive of…

Q: Companies set reorder points based upon what criterion? a. All of these choices…

A: The reorder point is a predetermined level of inventory when a company should place a new order or…

Q: Which of the following ratios would a company want to see decrease over time? ROA Days Sales…

A: The statistical assessment of a company's financial success is done through ratio analysis. It…

Q: Assuming rising inventory prices, which statement is correct? Group of answer choices A. FIFO…

A: INTRODUCTION: First in, first out, or FIFO, is a technique of valuing assets or inventories. The…

Q: A single-step income statement for a merchandising firm: Question 7 options: A) Shows a…

A: The statement that represents the expenses, revenue, and profit/loss created by running a business…

Q: Companies set reorder points based upon what criterion? a. All of these choices…

A: The reorder point is a predetermined level of inventory when a company should place a new order or…

Q: Th e information provided by a low-quality fi nancial report will most likely :A . decrease company…

A: SOLUTION:- Financial reporting quality is related to the quality of the information contained in…

Q: What is inventory shrinkage? The difference between product cost and retail selling price. The…

A: Inventory shrinkage refers to the discrepancy between the perpetual system generated Inventory level…

Q: Very high inventory turnover ratio relative to industry norms could possibly indicate the company…

A: The objective of the question is to understand the implications of a very high inventory turnover…

Q: Explain the purpose of the inventory turnover ratio? Is it possible for a firm to have a high…

A: In finance we make use of various financial ratios to determine the financial health of a company.…

Q: Sales returns and allowances increasing by a greater amount than sales revenues can cause confusion…

A: Sales is the amount earned either by selling goods or services. It is the primary activity…

Q: If a company is using the lower-of-cost-or-market rule and a write-down is required, how will that…

A: Cost of ending inventory (asset) can be decreased as an adjustment. An adjusting entry needs to be…

Q: Which of the followings is/are drawbacks associated with valuation by comparables with P/S or P/E?…

A: If the the earnings are negetive, then value would also be negetive, which is not possible. If…

Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Fluctuations in unit volume, changes in unit price or unit
cost of goods sold and modifications in the sales mix of a
firm's offerings are all causes for a decrease in which of the
following
Net Sales
Gross Margin
Trade Margin
Gross Sales
Net Margin

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Understanding the Factors:

VIEW

Step 2: Explanation of correct and incorrect options:-

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

QUESTION 33 Under generally accepted accounting principles, a company can choose among different cost flow assumptions for valuing cost of goods sold that can result in different income reporting. However, a company cannot frequently change the cost flow assumption adopted in order to measure the highest income possible because of the: conservatism principle. going concern principle. stable-dollar principle. consistency principle.
Which one of the following is an advantage of LIFO? a. In periods of rising prices, less income taxes are paid b. In periods of rising prices, more holding gains are reported in net income c. Record keeping and financial statement preparation are easier d. Conservative income statement and balance sheet disclousures result from falling prices
1. Which of the following shows the degree of operating leverage? The percentage change in the sales volume as the result of the percentage change in cost of the goods sold The percentage change in the net income as the result of the percentage change in the variable costs The percentage change in the sales volume as the result of the percentage change in the sales price The percentage change in the net inome as the result of the percentage change in the sales volume The percentage change in the operating income as the result of the percentage change in the sales volume
24. Under which method may companies manipulate their income by choosing which units to sell? a) FIFO b) LIFO c) Weighted Average d) Specific Identification
What does the inventory turnover period ratio measure? Select one: a.Profitability. b.The average time an organisation holds inventory. c.The liquidity of the firm. d.How much the firm's current assets could decrease and still leave it able to pay its current liabilities.
DONT GIVE ANSWER IN IMAGE FORMAT
Which is not a potential problem of utilizing ratio analysis? A. trends and industry averages are historical in nature. B. financial data may be distorted due to price-level changes. C. firms within an industry may not use similar accounting methods. D. all of the above E. answer not given
Why would a company’s manager be concerned about the quantity of its purchases returns if its suppliers allow unlimited returns?
Which one of the following statements is true? a. Income manipulation is difficult under LIFO.b. Accounting principles do not require that the inventory cost flow approximate the physical flow of goods.c. Companies may use LIFO for tax purposes and FIFO in the financial statements.d. In periods of declining prices, LIFO will result in the payment of less income taxes.