In a multiple-step income statement, interest expense usually is not classified as an operating expense because interest charges: a do not contribute to the production of revenue. b Relate directly to the cost of goods sold. c Stem from the manner in which assets are financed, not the manner in which they are used in business operations. d The statement is incorrect. Interest usually is classified as an operating expense.

In a multiple-step income statement, interest expense usually is not classified as an operating expense because interest charges: a do not contribute to the production of revenue. b Relate directly to the cost of goods sold. c Stem from the manner in which assets are financed, not the manner in which they are used in business operations. d The statement is incorrect. Interest usually is classified as an operating expense.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 22MC: A simple income statement ________. A. combines all revenues into one category B. does not combine...

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Question

In a multiple-step income statement, interest expense usually is not classified as an operating expense because interest charges:

a do not contribute to the production of revenue.

b Relate directly to the cost of goods sold.

c Stem from the manner in which assets are financed, not the manner in which they are used in business operations.

d The statement is incorrect. Interest usually is classified as an operating expense.

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