Directions: Read the given sentences carefully. Select the best answer from the choices given below. Write your answer on the space provided before each item. Gains Purchases Sales Income Gross Profit Sales Discount Selling expenses Professional Fee Net Income Operating expenses Sales return Cost of Goods Sold Service Income 1. An example of service revenue. 2. The revenue generated from the sale of products. 3. It is computed by deducting the cost of sales from net sales. 4. It is used to describe revenue derived from the rendering of services. 5. A type of income derived from the other activities of the business. 6. The account used to report the acquisitions of merchandise for sale. 7. It represents the actual cost of inventories that the company was able to sell. 8. These are expenses that are directly related to the main purpose of a merchandising business 9. A contra-sales account that is used to report the amount of discount given to or taken by the customers. 10. It refers…

Please solve the following question. Using the accounts below, prepare a basic Income Statement. All accounts will be used once. Use the example below to help with the solution Cost of Goods Sold General & Admininstrative Expense Interest Expense Net Sales Revenue Net Sales COGS Selling Expense Wages Expense Gross Profit or Margin Operating Expenses: Selling Exp General & Admininstrative Exp Research & Development Exp Insurance Exp Here an example of this type of question that you can use to help with the solution Income Statement For Year Ending Dec. 31, 2022 Wages Exp Depreciation, Amortization, & Depletion Exp Total Operating Expenses Operating Income Other Income/Loss: Interest Income Gain on Sale of Asset Loss on Sale of Asset Interest Expense Income before Taxes Income Tax Expense $ $ $ $ $ $ Net Income 22,000 15,000 2,200 100,000 $ 10,000 5,000 $1,000,000 (450,000) 550,000 15,000 225,000 5,000 7,500 85,000 20,000 357,500 192,500 20,000 5,000 (5,000) (10,000) 202,500 (142,500)…

Which of the following represents the components of the income statement for a merchandising business? Select one: a. Service Revenue – Operating Expenses = gross profit b. Sales Revenue – Cost of Goods Sold = gross profit c. Service Revenue – Cost of Goods Purchased = gross profit d. Sales Revenue – Cost of Goods Manufactured = gross profit