Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 4 - Income Statement and Related Information - Questions - Page 188: 20

Answer

Both formats are accurate. However, the main objective of preparing financial statements is to help with decision making, and the best way to present easily understandable financial statements is by recording a single amount for selling expenses. This should also be accompanied by a supporting schedule affiliated with the eight items.

Work Step by Step

Nevertheless, if the income statements aim to communicate as much information as possible, he may use the separate listing of the expenses.
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