On the Income Statement

question 106

Multiple Choice

On the income statement:

• A) selling, general and administrative expenses are the costs of operations that are not directly related to merchandise purchases and occupancy.
• B) income tax expense will not be found on the income statement since corporations do not pay taxes.
• C) net income is another term for income from continuing operations.
• D) selling, general and administrative expenses are shown before gross profit.

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Definitions:

Bankers Acceptances

A short-term debt instrument issued by a company that is guaranteed by a commercial bank, often used in international trade.

Inventory Loan

A loan taken by a company to purchase inventory, where the inventory itself often serves as collateral for the loan.

Carrying Costs

Expenses incurred by a company for holding inventory over a period of time, including costs associated with warehousing and maintaining goods.