Asked by Rheanna Chase on Jul 12, 2024
Verified
Which of the following costs is most likely to be the largest expense reported on the income statement of a merchandiser,such as Walmart Stores,Inc.?
A) Utilities expense.
B) Cost of goods sold.
C) Advertising expense.
D) Income tax expense.
Merchandiser
A business or person who promotes, buys, sells, or distributes goods and commodities for resale.
Income Statement
A report that outlines a business's financial results, including income, expenses, and net profit or loss, for a designated accounting period.
- Familiarize yourself with the necessary documentation for different expense classifications on the income statement.
Verified Answer
MA
Mostafa Abdel HadiJul 13, 2024
Final Answer :
B
Explanation :
Cost of goods sold is likely to be the largest expense reported on the income statement of a merchandiser. This is because merchandisers purchase goods to sell, and the cost of those goods is known as cost of goods sold. The cost of goods sold is typically a direct expense, which means it is directly related to the revenue generated from the sale of those goods.
Learning Objectives
- Familiarize yourself with the necessary documentation for different expense classifications on the income statement.
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