A merchandising company's:
A) expenses include both period costs and product costs.
B) expenses include only product costs.
C) expenses include only period costs.
D) income statement doesn't include gross margin.

Question

Quizplus · Accepted Answer

A merchandising company's expenses include both period costs (such as selling and administrative expenses) and product costs (cost of goods sold). This is because the income statement for a merchandising company typically shows gross margin (sales minus cost of goods sold) and then deducts operating expenses to arrive at net income.

A Merchandising Company's