1. Select the incorrect statement regarding return on sales.

a. Return on sales refers to the average amount of each sales dollar remaining after all expenses are subtracted

b. Return on sales may be called net margin too

C. The amount of return on sales is affected by a company's choices of accounting principles

Olaf Co began the year with $699 in its Supplies account. During the year, the company purchased $1,700 of supplies on account. The company paid $1,500 on accounts payable by year end. At year end, Olaf counted $700 of supplies on hand. Olaf's financial statements would show:

Supplies supplies expense

a. $800. $100

b. $700. $1,600

c. $700. $1,000

D. $800. $1,700

e. none are correct

D. The smaller the return on sales the better.

e None are incorrect