Which of the following is the equation form of operating profit (EBIT)?

a. income - COGS

b. gross profit - operating expenses

c. liabilities + owner's equity

d. operating profit - other revenues and expenses

e. EBT - taxes

Which of the following is a disadvantage of using a cash-based accounting system?

a. It may be misleading with respect to understanding a company's actual cash position.

b. It can distort measure of the profitability of a business.

c. It needs greater bookkeeping requirements.

d. It is a more sophisticated approach to accounting.

e. It provides an accurate indication of the profitability of a business.