The principal difference between a merchandising and a manufacturing income statement is the
A) cost of goods sold section.
B) extraordinary item section.
C) operating expense section.
D) revenue section.

Question

Quizplus · Accepted Answer

The cost of goods sold section is the main difference between a merchandising and a manufacturing income statement. The cost of goods sold section is for companies that sell products, like a retailer or wholesaler, while a manufacturing income statement calculates the cost of producing goods. The other sections, such as revenue, operating expenses, and extraordinary items, are present in both types of income statements.

The Principal Difference Between a Merchandising and a Manufacturing Income