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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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