Which of the following are the two types of expenses recorded on the income statement?
A) cost of goods sold and production costs
B) sales expenses and administrative expenses`
C) operating expenses and administrative expenses
D) cost of goods sold and operating expenses

Question

Quizplus · Accepted Answer

The two types of expenses recorded on the income statement are cost of goods sold and operating expenses. Cost of goods sold represents the expenses directly related to the production of goods sold by the company, while operating expenses are the expenses incurred in running the day-to-day operations of the company, such as rent, salaries, and utilities. Option A is incorrect because production costs are a type of cost of goods sold. Option B is incorrect because sales expenses are typically included in operating expenses. Option C is incorrect because operating expenses and administrative expenses are essentially the same thing.

Which of the Following Are the Two Types of Expenses