On a common-size income statement,selling expense is shown as a percentage of
A)Net sales revenue.
B)Operating income.
C)Net income.
D)Gross profit.

Question

Quizplus · Accepted Answer

Selling expense is typically considered a variable cost directly related to the generation of sales revenue. As a result, it is best shown as a percentage of net sales revenue on a common-size income statement. This allows for analysis of the percentage of revenue that is being spent on selling, which can be useful for assessing the overall efficiency and effectiveness of the sales function.

On a Common-Size Income Statement,selling Expense Is Shown as a Percentage