In the income statement expenses are classified into four categories, cost of sales, selling and distribution, administrative, and financial. Expenses incurred for storage costs and advertising are classified as:

Question

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Expenses incurred for storage costs and advertising are considered part of the selling and distribution expenses category. Cost of sales represents the direct costs associated with producing and delivering goods or services, while administrative expenses represent the general overhead costs of running a business. Financial expenses relate to the cost of financing activities such as interest on loans or dividends on stocks.

In the Income Statement Expenses Are Classified into Four Categories