Partial Income Statements of Company a and Company B Are

question 1

Multiple Choice

Partial income statements of Company A and Company B are provided below: $\begin{array}{|lr|l|lll|}\hline\text { Company A }&&&\text { Company B }\\\text { Revenue } & \$ 80,000 && \text { Revenue } & \$ 50,000 \\\text { Expenses: } & & & \text { Cost of Goods Sold: } & & \\\text { Utilities Expense } & \$ 5,000 & & \text { Beginning Inventory } & \$ 4,000 & \\\text { Salaries Expense } & 15,500 & & \text { Purchases and Freight In } & 23,000 & \\\text { Rent Expense } & 3,200 & & \text { Ending Inventory } & -5,500 \\\text { Total Expenses } & 23,700 &&\text { Cost of Goods Sold } &21,500\\\text { Operating Income } & \$ 56,300&&\text { Gross Profit }&\$28,500\\\hline\end{array}$ Which of the following statements is true?

• A) Company A is a merchandising company.
• B) Company B is a manufacturing company.
• C) Company A is a manufacturing company.
• D) Company A is a service company.

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Definitions:

Free Alongside

In shipping, a term indicating that the seller is responsible for the cost of transporting goods to a designated point next to a vessel before loading.

Piracy

is the unauthorized use or reproduction of another's work, often relating to copyright infringement, especially in the context of software, music, and movies.

Registered Ships

Vessels that are officially listed with a specific country's registry to identify the nation of registration and ensure compliance with that nation's laws and regulations.

Sailors

Individuals who operate or work aboard ships, navigating and maintaining them.