Which Statement Is Correct About Expenses on the Statement of Income

question 24

Multiple Choice

Which statement is correct about expenses on the statement of income?

• A)Classifying expenses by nature means that expenses are reported according to the activity for which they are incurred.
• B)Examples of expenses classified by function are cost of goods sold and administrative expenses.
• C)Expenses must be classified by their function.
• D)Expenses must be classified in decreasing order of magnitude.

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Definitions:

Theoretical Approach

An organized set of principles and ideas intended to explain specific phenomena or guide research and practice in a particular field.

Functionalism

A theoretical framework in sociology that focuses on how the various parts of society contribute to the overall stability and functionality of the system.

Darwin

Charles Darwin, a 19th-century naturalist best known for his contributions to the science of evolution, proposing that species evolve over time through natural selection.

Evolutionary Theory

A scientific explanation of the diversity of life on Earth, stating that species change over time through processes like natural selection and genetic mutation.