Indicate Which One of the Following Would Appear on the Income

question 20

Multiple Choice

Indicate which one of the following would appear on the income statement of both a merchandiser and a service enterprise.

• A)Gross profit
• B)Operating expenses
• C)Sales revenues
• D)Cost of goods sold

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Definitions:

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for goods or services sold on credit.

Average Annual Sales

Average annual sales represent the mean revenue a company generates per year over a specified period, commonly used to assess business performance and growth trends.

Credit Policy

Guidelines that a company follows to determine credit limits and terms for customers, which affects how and to whom credit is extended.

Cost Of Sales

This refers to the direct costs attributable to the production of the goods sold by a company, including material and labor costs.