Which of the following costs is most likely to be the largest expense reported on the income statement of a merchandiser,such as Walmart Stores,Inc.?
A)Utilities expense.
B)Cost of goods sold.
C)Advertising expense.
D)Income tax expense.

Question

Quizplus · Accepted Answer

Cost of goods sold is likely to be the largest expense reported on the income statement of a merchandiser. This is because merchandisers purchase goods to sell, and the cost of those goods is known as cost of goods sold. The cost of goods sold is typically a direct expense, which means it is directly related to the revenue generated from the sale of those goods.

Which of the Following Costs Is Most Likely to Be