Positive operating income will result if gross profit exceeds
a. costs of goods sold.
b. salaries and wages expense.
c. cost of goods sold plus operating expenses.
d. operating expenses.
Operating income is also known as earnings before interest and expense. These is computed by deducting the cost of goods sold and the operating expenses to the net sales during the period.
Answer and Explanation: 1
The answer is d. operating expenses.
|Less: Cost of Goods Sold||xxx|
|Less: operating Expenses||xxx|
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fromChapter 2 / Lesson 2
Learn about what goes on an income statement and its format, including how to prepare, what is shown, and examples. Discover the importance of income statements.