| A | B |
|---|
| Multi-step income statement | Format that contains subtotals to highlight significant relationships. In addition to net income, it reports gross profit and operating income. |
| income from operations (operating income) | Gross profit minus operating expenses. |
| Gross Profit | Excess of net sales revenue over cost of goods sold |
| Other Revenue | Revenue that originates outside the main operations of a business. |
| Sales Returns and Allowances | A contra account to sales revenue. |
| Gross Profit Percentage | Gross profit divided by net sales revenue. |
| Cost of Goods Sold | The largest single expense of most merchandising businesses. |
| Operating Expenses | Expenses, other than cost of goods sold, that are incurred in the entity’s major line of business. |
| Net Sales Revenue | Sales revenue minus sales discounts and minus sales returns and allowances. |
| Inventory Turnover | Ratio of cost of goods sold to average inventory. |
