1. Two income statements for Toby Sam Enterprises are shown below:

Toby Sam Enterprises
Income Statement
For the Years 2 and 1 Ending December 31
	Year 2	Year 1
Fees earned	$674,350	$520,600
Operating expenses	472,045	338,390
Operating income	$202,305	$182,210

Prepare a vertical analysis of Toby Sam Enterprises income statements. Has operating income increased or decreased as a percentage of revenue?

a. increased by 111%

b. decreased by 5%

c. decreased by 111%

d. increased by 5%

2. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:

Accumulated Depreciation	$ 3,200
Fees Earned	17,400
Depreciation Expense	1,300
Insurance Expense	400
Prepaid Insurance	4,800
Supplies	900
Supplies Expense	3,800

Net income for the period is

a. $5,500

b. $17,400

c. $11,900

d. $8,700

3. The ratio of sales to assets measures how effectively a business is using its assets to generate sales. True or False