What does it mean when a company has a major expense? Like for example, "The major expense for Dollar Tree Inc. is called Cost of Goods Sold, which represents the cost of the goods Dollar Tree sold to it's customers". But isn't expense a cost, it decreases net income? I did not understand this statement.

What does it mean when a company has a major expense? Like for example, "The major expense for Dollar Tree Inc. is called Cost of Goods Sold, which represents the cost of the goods Dollar Tree sold to it's customers". But isn't expense a cost, it decreases net income? I did not understand this statement.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 13DQ

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Which of the following statements is/are FALSE: I. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows. V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset’s useful life and increase the asset’s capacity is…
Companies that use OSD can deduct the cost of sales or the cost of services. Is it true or false?
This question has stumped me. I dont understand how the number change under cost of goods sold. So if you could answer this and show how you get the answer I would appreciate it. Do not give answer in image
Companies that use OSD can deduct the cost of goods sold or the cost of services provided. Is it true or false?
4. What is the difference between the SCI of a service entity from a merchandising entity? 5. What is the formula in computing Net Income (Loss) for Service Entities? 6. What is the formula in computing Net Sales? 7. What is the formula in computing Cost of Goods Sold?
1. What is the relevant cost to make the part? State answer in total dollars NOT per unit and as a positive number. 2. Should Ran Corporation make the part? 3. What should Ran ignore? Why? 4. What would be the impact on total Net Income if Ran corporation accepted the supplier's offer? Show a negative for a loss, positive for a gain.
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How cost accounting is useful where financial accounting could not be answered. Give any exampleto support your answer.