Multiple Choice Question 98

The gross margin percentage shows how much of each sales dollar is available after which of the following income statement components has been covered?

Operating expenses

Cost of goods sold

Contribution margin

Net income

Multiple Choice Question 106

Which of the following is the reason that preferred dividends declared during the period are deducted from net income in calculating return on common stockholders equity?

Preferred dividends will reduce the amount of income available for distribution to common stockholders.

Preferred dividends are not paid from net income.

Preferred dividends are not a part of stockholders equity.

Preferred dividends are not paid until all common stockholders have received their dividends, so preferred dividends are not relevant in the formula and so must be taken out of the equation.

Multiple Choice Question 109

Earnings per share must be reported on the face of every income statement that is

prepared in accordance with generally accepted accounting principles.

prepared in accordance with the national association of state boards of accountancy standards.

prepared in accordance with ethical standards set by the american institute of certified public accountants.

prepared in accordance of the federal government.