Question

The income statement is divided into three major categories. What are these categories?

A. revenues, cost of goods sold, and operating expenses
B. assets, liabilities, and owners' equity
C.early sales, middle sales, and late sales
D. revenues, sales, and winnings

Answer 1

The three major categories of the income statement are revenues, cost of goods sold, and operating expenses, covering different aspects of a company's financial performance.

Step-by-step explanation:

The income statement is divided into three major categories: revenues, cost of goods sold (COGS), and operating expenses. Revenues are income that a company receives from its normal business activities, usually from the sale of goods and services to customers.

The cost of goods sold is the direct costs attributable to the production of the goods sold by a company. Operating expenses are the costs associated with running the business that are not directly tied to producing the product or service, such as rent, utilities, and payroll.