Question

In a merchandising business, operating income plus operating expenses is equal to a.Cost of merchandise available for sale b.Gross profit c.Cost of merchandise sold d.Sales

Answer 1

Answer:

b.Gross profit

Explanation:

here is an example of a very simple income statement:

Sales revenue                  $10,000

Cost of goods sold          ($5,000)

Gross profit                       $5,000

Operating expenses       ($3,000)

Operating income            $2,000

If you start backwards, operating profit + operating expenses = gross profit

net income = operating profit (EBIT) - interests - taxes