On a multiple-step income statement, operating income results from subtracting total operating expenses from which of the following amounts?
A)gross margin
B)cost of goods sold
C)income before taxes
D)net sales

Question

Quizplus · Accepted Answer

Operating income is calculated by subtracting total operating expenses from the gross margin, not directly from net sales, cost of goods sold, or income before taxes. Gross margin itself is derived from subtracting the cost of goods sold from net sales.

On a Multiple-Step Income Statement, Operating Income Results from Subtracting