Which of the following appears in the income statement of a merchandising business,but not in the income statement of a business that renders only services?
A)Interest revenue
B)Gross profit
C)Advertising expense
D)Income tax expense

Question

Quizplus · Accepted Answer

Gross profit is a term used in the income statement of a merchandising business which is calculated as sales revenue minus cost of goods sold. A business that renders only services does not have cost of goods sold and therefore does not have gross profit. Interest revenue, advertising expense, and income tax expense can appear in the income statement of both types of businesses.

Which of the Following Appears in the Income Statement of a Merchandising