Indicate Which One of the Following Would Appear on the Income

question 124

Multiple Choice

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

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

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Definitions:

Limited Liability Company

A corporate framework that merges the tax benefits of a sole proprietorship or partnership with the protective limited liability found in a corporation.

Sole Proprietor

The single person at the head of a sole proprietorship.

Cooperatives

A business organization owned and operated by a group of individuals for their mutual benefit.

S Corporation

A special designation for a corporation that elects to be taxed as a pass-through entity, avoiding double taxation on the corporate income.