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a common components of the income statements of both trading and service businesses is ________ expenses

a common components of the income statements of both trading and service businesses is ________ expenses

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Answer #1

Answer---A common components of the income statements of both trading and service businesses is Operating expenses

Operating expenses such as rent, salary, insurance , advertisement, Utility etc are common for both trading and service businesses.

Main revenue of service businesses are service revenue since no goods are traded. There is no cost of goods sold in service businesses, but operating expenses.

On the other hand in trading business main revenue is from sales of merchandise. Main expense is cost of goods sold. Operating expenses are deducted from gross profit to get net operating income.

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