Which of the following is considered to be an expense on the income statement?

  1. Wages payable.
  2. Notes payable.
  3. Accounts payable.
  4. Cost of goods sold.

Answer d. Cost of goods sold

Explanation: Cost of goods sold (COGS) is concerned with the immediate expenses of delivering the products sold by an organisation. This sum incorporates the expense of the materials and works directly used to make the products. It doesn’t consider indirect costs, for example, sales force costs and distribution costs.

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