Accounting 5 Questions and Graded Answers.
Which of the following describes how a merchandise income statement is different from a
service income statement?
A. D The revenue from a merchandise business is reported as fees earned.
B. The program and production expenses are subtracted from gross profit to arrive at operating
income.
C. Depreciation and amortization expenses are added to the cost of goods sold.
D. A merchandise business shows a gross profit line. - d
How is gross profit for a merchandise business determined? - sales minus cost of goods
sold
Which of the following is subtracted from gross profit to reach operating income?
A. programming and production and expenses
B. amortization expenses
C. depreciation expenses
D. selling, administrative revenue, and manufacturing costs - c
When merchandise is sold, the revenue is reported as sales, and its cost is recognized as an
expense called - cost of goods sold
For a service business, which of the following would NOT be a line item on the income
statement?
A. Operating income
B. Fees earned
C. Operating expenses
D. Gross profit - d
Which of the following describes how a merchandise income statement is different from a
service income statement?
A. D The revenue from a merchandise business is reported as fees earned.
B. The program and production expenses are subtracted from gross profit to arrive at operating
income.
C. Depreciation and amortization expenses are added to the cost of goods sold.
D. A merchandise business shows a gross profit line. - d
How is gross profit for a merchandise business determined? - sales minus cost of goods
sold
Which of the following is subtracted from gross profit to reach operating income?
A. programming and production and expenses
B. amortization expenses
C. depreciation expenses
D. selling, administrative revenue, and manufacturing costs - c
When merchandise is sold, the revenue is reported as sales, and its cost is recognized as an
expense called - cost of goods sold
For a service business, which of the following would NOT be a line item on the income
statement?
A. Operating income
B. Fees earned
C. Operating expenses
D. Gross profit - d
