5 Which of the following statement is correct? A. Earnings have high quality if

Question

5 Which of the following statement is correct? A. Earnings have high quality if they provide a full and transparent depiction of how a B. Quality of earnings ratio significantly less than 1 suggests that a company may be using C. Quality of earnings ratio significantly less than 1 suggests that a company is using D. Gross profit rate is determined by gross profit divided by net sales. company performed. In practice, analysts use profit ratio to assess earnings quality. more conservative accounting techniques in order to delay income recognition. aggressive accounting techniques which cause it to accelerate the recognition of income. Q13 Company completed its inventory count. It arrived at a total inventory value of S200,000. You have been given the information listed below. Discuss how this information affects the reported cost of inventorv.

Explanation / Answer

Answer is D

Gross profit rate is determined by gross profit divided by net sales

gross profit ratio or rate = gross profit/net sales

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