Which item is normally presented in the statement of financial position rather than as an expense in the income statement?
Correct answer: A. Accumulated depreciation
- A. Accumulated depreciation
- B. Sales commission
- C. Cost of goods sold
- D. Office electricity
Explanation
Accumulated depreciation is a contra-asset balance that reduces the carrying amount of the related non-current asset in the statement of financial position. The other items are expenses reported in determining profit.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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