On a Multi-Step Income Statement, Subtracting Total Operating Expenses from Gross

question 28

Multiple Choice

On a multi-step income statement, subtracting total operating expenses from gross profit will equal:

• A) gross margin.
• B) operating income.
• C) income before taxes.
• D) net income.

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Definitions:

Safeguarding Inventory

Strategies and practices aimed at protecting inventory from loss, theft, or damage.

Financial Statements

Reports that summarize the financial performance and position of a company, including the balance sheet, income statement, and statement of cash flows.

Physical Count

A manual counting process of inventory items in a business, used to verify the quantities of goods on hand and ensure the accuracy of accounting records.

Periodic Inventory System

An accounting method where inventory and cost of goods sold are determined at set intervals, such as monthly or annually.