The Income Statement of a Service-Sector Firm Reports ________

question 156

Multiple Choice

The income statement of a service-sector firm reports ________.

• A) period costs only
• B) inventoriable costs only
• C) both period and inventoriable costs
• D) direct labor costs

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Definitions:

Accrued Salaries

These are wages that have been earned by employees but have not yet been paid by the employer.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption or wear and tear.

Services Provided

Activities done for others as an economic product that are intangible, not stored, and produced at the time of consumption.

Unearned Ticket Revenue

Money received from ticket sales before the event has occurred, classified as a liability until the service is performed.