In the merchandising income statement, sales will be reduced by administrative expenses to arrive at operating income.

Question

Quizplus · Accepted Answer

In the merchandising income statement, sales are reduced by the cost of goods sold and selling expenses to arrive at operating income, not by administrative expenses. Administrative expenses are considered separately from the calculation of gross profit and are deducted afterward to determine net income.

In the Merchandising Income Statement, Sales Will Be Reduced by Administrative