An income statement that includes the following items: Revenue
Cost of Sales
Selling Expenses
Financial Expenses
Would have been prepared using the:
A) Nature of expense method.
B) Narrative method.
C) Revenues and gains approach.
D) The function of expense approach.
E) None of the given answers.

Question

Quizplus · Accepted Answer

The income statement that includes revenue, cost of sales, selling expenses and financial expenses would have been prepared using the Function of Expense approach. This approach groups expenses according to their function or purpose, such as cost of goods sold, selling expenses, and financial expenses. It provides a more detailed breakdown of the expenses, which can help in identifying areas where cost-cutting measures can be applied.

An Income Statement That Includes the Following Items: Revenue