1) Gross profit is:
A) Equal to net income
B) Sales revenue less all cost of running the busines
C) net difference between cost of inventory sold and sales proceeds
D) None of these define gross profit.
2) In a period of rising raw material cost the inventory cost flow assumption that will provide the firm with the highest net income would be?
A) FIFO
B) Last in/first out
C) Average cost
D) Last in/Last Out
3) Expenses incurred after acquisition of an asset and after it has been put into service would be?
A) expensed if required for normal operation
B) capitalized for normal operation
C) Expensed if the expenditure extends the useful life of the asset
D) capitalized if the expenditure extends the useful life of the assets.
4) Taking a " Big Bath" when a firm incurs an impairment loss means ?
A) Writing off more value than just the impaired Assets
B) using lots of water to clean up the facility
C) a loss hass occured because an assets was sold
D) A little house cleaning is in order.