Best Measures For Determining Profit Of A Firm

Question

1. The manipulation of the allowance for doubtful accounts by management would be best indicated by:

1. A company tightens its credit standards and the allowance account decreases.
2. A company lowers is credit standards and the allowance account decreases.
3. A company tightens its credit standards and the allowance account increases.
4. A company lowers its credit standards and the allowance account increases.

2. The best measure of profit for determining how well a firm operate within their industry is

1. Gross Profit
2. Operating Profit
3. Earnings before Taxes
4. Net profit

Summary

The multiple questions belong to Finance. The 1^st question discusses about the indicators of manipulation of allowance for doubtful accounts by management and the 2^nd question discusses about the best measure of determining the profit of a firm.

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