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7 July, 08:26

LO 2.1Which of the following represents the components of the income statement for a manufacturing business?

Sales Revenue â€" Cost of Goods Sold = gross profit

Service Revenue â€" Operating Expenses = gross profit

Service Revenue â€" Cost of Goods Manufactured = gross profit

Sales Revenue â€" Cost of Goods Manufactured = gross profit

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  1. 7 July, 09:25
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    Sales Revenue â€" Cost of Goods Sold = gross profit

    Explanation:

    In order to determine the income statement components, the following component is shown

    Gross profit = Sales revenue - the cost of goods sold

    where,

    Sales revenue represents the sales of the business organization

    And, the cost of goods sold would be

    = Opening inventory + Purchase - ending inventory

    By deducting the cost of goods sold from the sales revenue the gross profit can arrive
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