GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the items below doesn’t belong on the profit & loss statement?
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Depreciation
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Cost of Goods Sold
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Personnel expenses
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Principal Payment
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Explanation:
Detailed explanation-1: -It does NOT include selling or administrative expenses (these expenses are listed elsewhere on the P & L statement). For service and professional companies, there will be no cost of goods sold. These types of companies receive income from fees, commissions, and royalties and do not have inventories of goods.
Detailed explanation-2: -The main categories that can be found on the P&L include: Revenue (or Sales) Cost of Goods Sold (or Cost of Sales) Selling, General & Administrative (SG&A) Expenses.
Detailed explanation-3: -The statement of financial position is NOT associated with the income statement.
There is 1 question to complete.