The Operating Expense Section of an Income Statement for a Wholesaler

question 153

Multiple Choice

The operating expense section of an income statement for a wholesaler would not include

• A)freight-out.
• B)utilities expense.
• C)cost of goods sold.
• D)insurance expense.

Analyze the significance and calculation of net present value in investment decisions.

Determine how depreciation affects annual cash inflow calculations.

Perform incremental analysis for making financial decisions between different plans.

Identify and differentiate various types of costs, including sunk, incremental, opportunity, and variable costs.

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Definitions:

Good

An item or service that fulfills a consumer's want or need, which can be tangible, like a car, or intangible, like a service provided by a dentist.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefits received by all participants.

Good

A material item or service that fulfills wants or needs, often exchanged in economic transactions.

Equilibrium Price

The market price at which the quantity of a good or service demanded equals the quantity supplied.