Question

Which of the following statements is true? It is unnecessary to analyze operating expenses over which management exercises discretion. Impairment charges do not need to be analyzed since they are generally a nonrecurring expense. A good way to improve operating profit is to cut repairs and maintenance costs as much as possible. Operating expenses can be easily analyzed by preparing a common-size income statement.

Answer 1

The statement that is true in the options provided is Operating expenses can be easily analyzed by preparing a common-size income statement

Step-by-step explanation:

An income statement provides valuable insights into a company’s operations, the efficiency of its management, under-performing sectors and its performance relative to industry peers.

A common size income statement for a company will capture operating expenses carefully budgeted for in advance to meet the running cost of the company for a determined period.

Answer 2

Correct option is D

Operating expenses can be easily analyzed by preparing a common-size income statement.

Step-by-step explanation:

Common-size examination of the pay proclamation can be performed by expressing each detail on the salary explanation as a level of revenue.By expressing working cost as level of income we can investigate how a lot of level of income is working cost and we can analyze its pattern over past years.