Which of the Following Would Appear as a Line Item

question 181

Multiple Choice

Which of the following would appear as a line item on the income statements of both a merchandiser and a manufacturer?

• A) Direct Labor
• B) Cost of Goods Manufactured
• C) Direct Materials
• D) Cost of Goods Sold

---

Definitions:

Obligation

A duty or commitment to do something or to pay a debt, often legally binding.

Sell

The act of transferring ownership of a product or service from one party to another in exchange for money or other compensation.

Option Contract

A contract which gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a set price on or before a particular date.

Option Premium

The price paid for the right to buy or sell an underlying financial instrument at a specified strike price until the option expires.