When analyzing a company's income statement,a fact to remember is that:
A)cost of sales is another term for gross profit.
B)operating expenses are the costs of everyday operations such as selling expenses.
C)companies are not allowed to offset items such as interest income and interest expense against each other.
D)net sales is equal to sales revenue less cost of goods sold.

Question

Quizplus · Accepted Answer

Operating expenses are the costs incurred in the day-to-day operations of the business such as marketing, salaries, and administrative expenses. Cost of sales is the cost of producing or acquiring the goods sold and is subtracted from revenue to arrive at gross profit. Companies are allowed to offset items such as interest income and interest expense against each other. Net sales is calculated by subtracting any returns, discounts or allowances from gross sales.

When Analyzing a Company's Income Statement,a Fact to Remember Is