A company's chart of accounts includes,in part,the following account numbers and corresponding account titles:

-Which accounts would affect operating income?

Question

A company's chart of accounts includes,in part,the following account numbers and corresponding account titles:
 
-Which accounts would affect operating income?

Quizplus · Accepted Answer

Operating income is the amount of income that is generated from the normal recurring operations of a business.Items that are not expected to recur on a regular basis are subtracted from the operating income to determine the amount of net income.Here,operating income includes sales (9),cost of goods sold (3),transportation-out (4)and selling expense (7).The loss on the sale of the land (8)would not be expected to recur on a regular basis;thus,it does not affect operating income.

A Company's Chart of Accounts Includes,in Part,the Following Account Numbers