Which of the following are subtracted from sales in order to arrive at operating income? I. Cost of goods sold
II. Selling, general, and administrative expenses
III. Depreciation and amortization
IV. Interest expense

Question

Quizplus · Accepted Answer

Operating income is calculated by subtracting cost of goods sold (I), selling, general, and administrative expenses (II), and depreciation and amortization (III) from sales. Interest expense (IV) is not subtracted in the calculation of operating income; it is considered a non-operating expense and subtracted later to arrive at net income.

Which of the Following Are Subtracted from Sales in Order