Which of the following would NOT be found on the income statement of a service organization?
A)selling expenses
B)gross margin
C)operating income
D)cost of goods sold

Question

Quizplus · Accepted Answer

Cost of goods sold is a term used in the income statement of a merchandising or manufacturing company to represent the cost incurred in producing or purchasing the goods sold. Since service organizations do not sell goods, there is no cost of goods sold to be reported on their income statement. Selling expenses, gross margin and operating income could be found on the income statement of a service organization.

Which of the Following Would NOT Be Found on the Income