Multiple Choice
Which of the following best describes how understanding 'Net Sales' can help someone who tends to save money only as an afterthought?
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4. Merchandising Operations
Net Sales
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Which of the following is NOT included in continuing operations on the income statement?
A
Loss from discontinued operations
B
Cost of goods sold related to regular operations
C
Net sales from ongoing business activities
D
Operating expenses incurred during the period
Verified step by step guidance1
Understand the concept of continuing operations: Continuing operations refer to the revenues, expenses, and profits or losses generated by a company's core business activities that are expected to continue in the future.
Review the components typically included in continuing operations: These include net sales, cost of goods sold, and operating expenses related to the company's ongoing business activities.
Identify the concept of discontinued operations: Discontinued operations refer to parts of a business that have been sold, closed, or are no longer part of the company's core operations. Losses or gains from discontinued operations are reported separately from continuing operations on the income statement.
Analyze each option provided: Determine whether each item is part of continuing operations or discontinued operations. For example, 'Loss from discontinued operations' is explicitly excluded from continuing operations.
Conclude that the correct answer is the item that does not belong to continuing operations, based on the definitions and analysis of the options provided.
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