The income statement of a service company will most likely include:
A)salary expense.
B)factory overhead.
C)cost of goods sold.
D)direct materials.

Question

Quizplus · Accepted Answer

A service company's main source of expenses is likely to be salaries for employees providing the service, so salary expense is the most likely item to appear on the income statement. Factory overhead, cost of goods sold, and direct materials are more relevant to manufacturing or merchandising companies than to service companies.

The Income Statement of a Service Company Will Most Likely