Which of the Following Statements Is Correct

question 44

Multiple Choice

Which of the following statements is correct?

• A) The term single-step income statement is sometimes used to describe a classified income statement.
• B) If a business is to earn a net income, the gross profit on sales must be greater than operating expenses.
• C) Salaries of office employees would be grouped with the selling expenses in the Operating Expenses section of the income statement.
• D) All of the above statements are correct.

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Definitions:

Public Companies

Companies that generally have a large number of issued shares and widespread ownership.

Segment Profit or Loss

The financial performance of a distinct part of a company that engages in business activities from which it may earn revenues and incur expenses, resulting in its own net profit or loss.

External Customers

Individuals or entities that are not part of an organization but use or purchase its products or services.

Reconciliation

The process of ensuring that two sets of records (usually the balances of two accounts) are in agreement. It is a key accounting process.