What is characteristic of an income statement for a service or manufacturing firm?
A)A manufacturing company will not have gross margin.
B)The service company will have a finished goods inventory.
C)A service company will have cost of goods sold.
D)A manufacturing company's income statement will have gross margin.

Question

Quizplus · Accepted Answer

A manufacturing company's income statement will have gross margin, which is the difference between revenue and the cost of goods sold. A service company, on the other hand, will not have a finished goods inventory, which is typically found on a manufacturing company's income statement. And while a service company may have some expenses related to providing their services, they will not have a cost of goods sold in the sense that a manufacturing company would.

What Is Characteristic of an Income Statement for a Service