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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE).

  1. a. Utilities Expense
  2. b. Advertising Expense
  3. c. Purchases Discounts
  4. d. Sales Returns and Allowances
  5. e. Interest Income
  6. f. Freight In
  7. g. Depreciation Expense, Equipment
  8. h. Interest Expense
  9. i. Rent Expense
  10. j. Sales

To determine

Identify the given items of income statement, as per the given classifications.

Explanation

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Identify the given items of income statement, as per the given classifications.

ItemsClassificationJustification
a.SEUtilities expense is a selling expense because it is a recurring expense directly related to sale of goods or services.
b.SEAdvertising expense is a selling expense because it is a recurring expense directly related to sale of goods or services.
c.CGSPurchase discounts is the item which is required to determine the cost of goods sold.
d.SSales returns and allowances is the item which is required to determine the net sales.
e.OIInterest income is the income which is earned neither from a selling activity, nor a general activity...

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