The Principal Difference Between a Merchandising and a Manufacturing Income

question 87

Multiple Choice

The principal difference between a merchandising and a manufacturing income statement is the

• A) cost of goods sold section.
• B) extraordinary item section.
• C) operating expense section.
• D) revenue section.

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business or organization.

Wholesale Price

The cost of goods sold in large quantities, usually to retailers rather than directly to consumers.

Mark-up on Cost

The percentage added to the cost price of goods to cover overhead and profit.

Lettuce

A leafy green vegetable commonly used in salads and sandwiches.