Which of the Following Appears in the Income Statement of a Merchandising

question 107

Multiple Choice

Which of the following appears in the income statement of a merchandising business,but not in the income statement of a business that renders only services?

• A)Interest revenue
• B)Gross profit
• C)Advertising expense
• D)Income tax expense

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Definitions:

Inventories

Items possessed for the purpose of being sold during regular business operations, currently being produced for that sale, or as raw materials and supplies intended for use in manufacturing or service provision.

Remaining Useful Life

The estimated period during which an asset is expected to be economically usable by one or more entities, with consideration for its anticipated obsolescence.

Carrying Amount

The book value of assets or liabilities on a company's balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment charges.