In a traditional format income statement for a merchandising company, the selling and administrative expenses report all period costs that have been expensed as incurred.

Question

Quizplus · Accepted Answer

Selling and administrative expenses are considered period costs and are expensed as they are incurred, rather than being added to the cost of goods sold like direct costs. This is a standard practice in a traditional income statement for a merchandising company.

In a Traditional Format Income Statement for a Merchandising Company