Question Details

The operating expense section of an income statement 


1. The operating expense section of an income statement for a wholesaler would not include
a. freight-out.
b. utilities expense.
c. cost of goods sold.
d. insurance expense.
2. Income from operations will always result if
a. the cost of goods sold exceeds operating expenses.
b. revenues exceed cost of goods sold.
c. revenues exceed operating expenses.
d. gross profit exceeds operating expenses.
3. 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
4. Thelman Company reported the following balances at June 30, 2008:
Sales $10,800
Sales Returns and Allowances 400
Sales Discounts 200
Cost of Goods Sold 5,000
Net sales for the month is
a. $10,800.
b. $10,400.
c. $10,200.
d. $5,200.
5. Income from operations appears on
a. both a multiple-step and a single-step income statement.
b. neither a multiple-step nor a single-step income statement.
c. a single-step income statement.
d. a multiple-step income statement.



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