Asked by Carley Lambeth on Jun 21, 2024
Verified
Indicate which one of the following would appear on the income statement of both a merchandising company and a service company.
A) Gross profit
B) Operating expenses
C) Sales revenues
D) Cost of goods sold
Merchandising Company
A business that purchases goods wholesale and sells them retail; primarily involved in the selling of merchandise.
Gross Profit
The amount by which sales revenue exceeds the cost of goods sold, prior to the subtraction of administrative and other expenses.
- Determine the components and framework of profit and loss statements for merchandising enterprises.
- Recognize the different elements of the operating cycle and operating expenses in merchandising and service companies.
Verified Answer
SC
Soumyabrata ChakravartyJun 27, 2024
Final Answer :
B
Explanation :
Operating expenses appear on the income statements of both merchandising and service companies, as they include costs related to the administration and general operations of the business, regardless of the company's industry.
Learning Objectives
- Determine the components and framework of profit and loss statements for merchandising enterprises.
- Recognize the different elements of the operating cycle and operating expenses in merchandising and service companies.