In the multiple-step income statement, cost of merchandise sold is subtracted from a. selling expenses. b. sales. c. gross profit. d. operating expenses.

Question

Business

Sasha Frazier

23 April, 00:24

In the multiple-step income statement, cost of merchandise sold is subtracted from a. selling expenses. b. sales. c. gross profit. d. operating expenses.

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Macintosh · Answer 1

b. sales

Explanation:

As we know that

Income statement refers to the statement in which the revenues and the expenses incurred should be recorded

While on the other hand the multiple-step income statement refer to the statement in which there are various level like gross profit, total operating expenses etc

Plus we also know that

Gross profit = Sales - cost of goods sold

Therefore the cost of merchandise should be deducted from sales so that we can find out the gross profit