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.