chapter 4 quiz\n6\nmultiple - step income statements:\nmultiple choice\nnever include a computation for…
chapter 4 quiz\n6\nmultiple - step income statements:\nmultiple choice\nnever include a computation for gross profit.\nlist cost of goods sold as an operating expense.\nare required for the periodic inventory system.\nare only used in perpetual inventory systems.\nhave three main parts: gross profit, income from operations, and net income
Answer
Brief Explanations:
Multiple - step income statements calculate gross profit by subtracting cost of goods sold from net sales. Cost of goods sold is not an operating expense but a direct cost related to sales. They are not exclusive to periodic or perpetual inventory systems. They have three main parts: gross profit (sales - cost of goods sold), income from operations (gross profit - operating expenses), and net income (income from operations +/ - non - operating items).
Answer:
Have three main parts: gross profit, income from operations, and net income