Each Income Statement Account Is Linked to at Least One

question 26

Multiple Choice

Each income statement account is linked to at least one balance sheet account. Which of the following would be the related income statement account for the balance sheet account of inventories?

• A) cost of sales.
• B) depreciation expense.
• C) sales.
• D) none of the above.

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Definitions:

Bank Service Charges

Fees charged by banks for various services such as account maintenance, transactions, or overdrafts.

Bank Reconciliation

A process that explains the difference between the bank balance shown in an entity's bank statement, as supplied by the bank, and the corresponding amount shown in the entity's own accounting records at a particular point in time.

Bank Interest

Interest charged by banks on loans or earned on savings accounts and other investments.

Bank Reconciliation

The process of comparing and adjusting the balance shown in a company's bank statement with the balance in its own records.