Cost of sales appears on both a descriptive format income statement and a functional format income statement.

Question

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Cost of sales is a key expense item that is included in both the descriptive format income statement (which presents expenses by categories such as cost of sales, selling and administrative expenses, etc.) and the functional format income statement (which presents expenses by their function such as cost of goods sold, selling expenses, general and administrative expenses, etc.).

Cost of Sales Appears on Both a Descriptive Format Income