Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Net operating income is income before which of the following deductions?

Interest and income taxes

Cost of goods sold and depreciation

Dividends and extraordinary items

Sales returns and allowances

Previous problemNext problem

Verified step by step guidance

Understand the concept of Net Operating Income (NOI): Net Operating Income is a measure of a company's profitability from its core operations, excluding non-operating expenses such as interest and income taxes.

Identify the deductions excluded from NOI: NOI is calculated before deducting interest expenses and income taxes, as these are considered non-operating items. It focuses solely on operational performance.

Review the options provided: Analyze each option to determine which deductions are excluded from NOI. For example, 'Interest and income taxes' are non-operating expenses, while 'Cost of goods sold and depreciation' are operating expenses.

Eliminate incorrect options: Exclude options that include deductions not related to non-operating expenses, such as 'Dividends and extraordinary items' or 'Sales returns and allowances,' which are unrelated to NOI calculation.

Select the correct answer: Based on the definition and exclusions of NOI, choose the option that correctly identifies deductions excluded from NOI, which is 'Interest and income taxes.'