FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Explain percent of sales method.
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- Explain the drawing Financails Sales Expenes profitsarrow_forwardAre net sales = Sales less?a. Sales returnsb. Sales discountsc. Sales returns & allowancesd. Sales returns & allowances and sales discountsarrow_forwardIndicate the effects on gross profit the changes in volume, unit selling price, and unit cost. Write an “X” on the appropriate and explained Effects in Gross Profit Favorable Unfavorable A. Volume - Increase - Decrease B. Selling Price – Increase - Decrease C. Unit Cost - Increase - Decreasearrow_forward
- How do you calculate gross profit as a percentage of sales?arrow_forwardThe gross margin estimation method estimates the cost of goods sold by multiplying the costs to sales ratio by purchases. O multiplying the sales revenue by the inventory turnover ratio. multiplying the cost of goods available by the gross margin percentage. O multiplying the sales revenue by cost-to-sales ratio.arrow_forwardHow should you compute the number that appears as "cost of good sold" in a common-size income statement?arrow_forward
- Concept introduction Gross profit ratio: Gross profit ratio calculated by dividng the gross profit by sales.The formula to calculate the gross profit ratio is as follows: Gross profit = Gross profit/sales Gross profit is calculated using the following formula: Gross profit= Sales-Cost of Goods Sold To choose: The correct term for excess of sales over the cost of goods sold.arrow_forwardWrite the formula of the Price to Book Value Ratio and explain how a result of 2 should be interpreted.arrow_forwardDefine and describe the differences between a sales return and a sales allowancearrow_forward
- What are the three approaches to calculating the sales required to achieve the target profit? Give the formula for each one.arrow_forwardThe transfer price is a revenue to sales devision and cost to the buying devision. Say true or False why?arrow_forwardThe COGS is estimated by deducting the gross profit from sales revenue. Distinguish between gross profit as a percentage of cost and gross profit as a percentage of sales price and how do you convert the gross profit % based upon cost to gross profit % based upon selling price?arrow_forward
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