According to the textbook, the three numbers that receive the most attention when evaluating an income statement are ________.
A) depreciation, interest income, and income tax expense
B) cost of sales, gross profit, and operating expenses
C) net sales, cost of sales, and operating expenses
D) gross profit, net sales, and income tax expense
E) gross profit, other income, and net income

Question

Quizplus · Accepted Answer

Net sales, cost of sales, and operating expenses are considered the most important numbers on an income statement because they help to determine the gross profit and net income of the business. Net sales represent the total revenue generated by the business, while cost of sales represents the expenses directly associated with producing and selling the products or services. Operating expenses include all other expenses incurred by the business, such as marketing, administration, and rent. These three numbers are used to calculate the gross profit and net income of the business, providing investors and analysts with key information on the profitability and financial health of the company.

According to the Textbook, the Three Numbers That Receive the Most