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Which of the following should appear in the income statement? Salaries and wages Property, plant and equipment Motor vehicles Trade receivables Bank loan

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Which of the following should appear in the income statement?
Salaries and wages
Property, plant and equipment
Motor vehicles
Trade receivables
Bank loan

Which of the following should appear in the income statement? Salaries and wages Property, plant and equipment Motor vehicles Trade receivables Bank loan

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EvanExpert · Tutor for 3 years

Answer

Salaries and wages<br />(Salaries and wages is the item that should typically appear in the income statement.)

Explain

## Step1: <br />To solve this problem, we need to understand that the income statement is one of the major financial statements of a company that reveals the company's profit or loss over a specific time period which includes revenue, cost of goods sold (COGS), gross profits, and expenses. Therefore, we should identify which item from the given options normally appears within this structure. <br /><br /><br />## Step2: <br />The option "Salaries and wages" is typically part of the operating expenses listed in an income statement since it covers what a company pays to its workforce over a specific period covered by the income statement. These expenses directly relate to the day-to-day activities of the company in earning revenues.<br /><br /><br />## Step3: <br />"Property, plant and equipment," "Motor vehicles," and "Trade receivables" are all types of assets, so they typically appear on a company's balance sheet, not in the income statement. <br /><br /><br />## Step4: <br />"Bank loan" is a liability and, hence, generally appears on a company's balance sheet, not the income statement. <br /><br />### Formulas/measures applied in this problem: <br />The basic formula often used for an income statement is: <br />### **Revenues - Expenses = Net Income**
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