Asked by Yamile Espinosa on Jul 09, 2024
Verified
In a merchandising business, sales minus operating expenses equals net income.
Operating Expenses
Costs associated with a company's main operational activities, excluding the cost of goods sold.
Net Income
The total profit of a company after all expenses and taxes have been deducted from revenue, indicating the financial performance over a specific period.
- Understand the distinct differences in the accounts of financial statements for service versus merchandising enterprises.
Verified Answer
AB
Aryan BhatnagarJul 12, 2024
Final Answer :
False
Explanation :
In a merchandising business, net income is calculated by subtracting both the cost of goods sold (COGS) and operating expenses from sales, not just operating expenses.
Learning Objectives
- Understand the distinct differences in the accounts of financial statements for service versus merchandising enterprises.
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