What I Know (True or False) For observation

The gross profit rate of the entrepreneurial venture is computed by dividing the cost of goods sold by net sales.

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The gross profit rate provides information on the cost ratio of the business.

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In evaluating the profitability of the entrepreneurial venture, the evaluation must focus on the information reflected on the face of the balance sheet.

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Mr. Q is a practicing Doctor of Medicine. During the month of March 2019 he received Professional Fees amounting to P 1,000,000 and total expenses of P250,000. The net income of Mr. Q is P 750,000.

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Profit is the money received from customer in exchange of products given to customer.

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The gross profit rate of the entrepreneurial venture is computed by dividing the cost of goods sold by net sales.

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The gross profit rate provides information on the cost ratio of business.

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One of the objectives in evaluating the gross profit rate of the business is to determine whether the amount of the gross profit is sufficient to cover the operating expenses.

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The government is not interested in financial statements since it is not a party to any of the transactions of the business.

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In normal situation, it is favorable for the business to have high inventory.

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