A service company's income statement does NOT include cost of goods sold.

Question

Quizplus · Accepted Answer

Cost of goods sold refers to the expenses incurred in producing or acquiring the products or services sold by a company. Since a service company does not sell tangible products, it does not have a cost of goods sold category in its income statement. Service companies instead have a separate category for expenses related to providing their services, such as wages for employees, rent for office space, and utilities.

A Service Company's Income Statement Does NOT Include Cost of Goods