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  3. 3/ consider the following income statement data fo

3/ Consider the following income statement data for Barolo Inc.: ...

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Accounting

3/ Consider the following income statement data for Barolo Inc.:

2020 2019
Sales revenue $97,300 $86,200
Less: Cost of goods sold 45,600 53,400
Gross profit 51,700 32,800
Less: Selling and administration costs 22,500 18,300
Net Income

$29,200

$14,500

The common-size percentage for selling and administration costs in 2020 was

a/ 21.2%.

b/ 23.1%.

c/ 43.5%.

d/ 77.0%.

4/ Why is the audit report important in the analysis of a company?

a/ It guarantees the accuracy of the information in the financial statements.

b/ It guarantees the accuracy of the internal controls of the company.

c/ The auditors are hired by management to assess the appropriateness of the accounting policies chosen.

d/ The auditors are an independent third party expressing an opinion on the fairness of the financial statements.

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