Which of the following, if true, strengthens Michaels’s argument? A)

QUESTION

Which of the following, if true, strengthens Michaels’s argument?

A) The company’s gross sales went up from the previous year.
B) Total operating expenses were high in the current year.
C) The company has only one part-time accountant.
D) There were few sales returns in the current year.
E) Offshoring allowed the company to trim administrative salaries by 25 percent.

ANSWER

Answer: B
Explanation: B) This means that revenues will be offset by significant expenses, which makes it more likely that the income statement will not be as good as Kershner is suggesting. Choices A and D suggest that sales revenue is relatively high, which does not strengthen Michaels’s argument that the income statement will not be as good as Kershner suggests. Choice C is not directly relevant to how the income statement will look overall. Choice E, showing a reduction in expenses, tends to weaken Michaels’s argument that the income statement might be disappointing.