Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 16 - No. 2)
In the provided information about the income statement, what is the role of the 'cost of goods sold' (or cost of sales)?
To show the total revenue generated.
To show the direct costs involved in producing goods.
To provide a measure of overall profitability.
To list the operating expenses for a period.
Explanation
The cost of goods sold represents the direct costs related to producing or purchasing the goods that were sold.
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