Which of the following line items will appear on the income statement of a merchandiser but not of a service company?
A) Salaries Expense
B) Depreciation Expense
C) Cost of Goods Sold
D) Supplies Inventory

Question

Quizplus · Accepted Answer

The cost of goods sold is the expense associated with the inventory sold by a merchandiser, which is included in the calculation of the gross profit. A service company does not have inventory, so it does not have a cost of goods sold. The other line items may appear on both the income statements of merchandisers and service companies.

Which of the Following Line Items Will Appear on the Income