Which of the Following Items Would Appear in the Income

question 9

Multiple Choice

Which of the following items would appear in the income statement of both a merchandising company and a service company?

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

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Definitions:

Sales

The transactions in which goods or services are transferred from seller to buyer for money or other compensation.

Cost of Goods Sold

Costs directly linked to the creation of products sold by a firm, such as the expenses for materials and workforce.

Income from Operations

The profit generated from a company's regular, core business activities, excluding non-operating income and expenses.