Which of the Following Costs Is Most Likely to Be

question 47

Multiple Choice

Which of the following costs is most likely to be the largest expense reported on the income statement of a merchandiser such as Wal-Mart?

• A)Salaries expense
• B)Cost of goods sold
• C)Advertising expense
• D)Income tax expense

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Definitions:

Shortage/Surplus

Market scenarios where the demand for a product surpasses its available supply, leading to a shortage, or where the supply of the product is greater than its demand, resulting in a surplus.

Demand Equation

is a mathematical representation that shows the relationship between the quantity of a good demanded and its price along with other factors affecting demand.

Supply Equation

A mathematical formula used to describe the relationship between the price of a good or service and the quantity supplied, holding other factors constant.

Price Floor

A government- or authority-imposed minimum price that can legally be charged for a good or service.