What are Total Expenses on Rocky’s Day Spa Income Statement?

Prepare for the Cengage Accounting Exam 1. Use flashcards and tackle multiple choice questions with hints and detailed explanations. Be exam-ready!

Multiple Choice

What are Total Expenses on Rocky’s Day Spa Income Statement?

Explanation:
Total expenses on an income statement are the sum of every cost the spa incurs during the period. To find them, list all expense items—salaries and wages (including payroll taxes and benefits), rent or lease payments for the facility, utilities, supplies used for services, depreciation on equipment, insurance, advertising, and any other operating costs—and add them all together. If Rocky’s Day Spa is a service business with no cost of goods sold, exclude COGS and focus on operating expenses. All non-operating costs (like interest) are typically included in total expenses unless the problem specifically separates operating from non-operating items. The correct answer reflects the exact total of these expense items combined, which is why it’s the best choice.

Total expenses on an income statement are the sum of every cost the spa incurs during the period. To find them, list all expense items—salaries and wages (including payroll taxes and benefits), rent or lease payments for the facility, utilities, supplies used for services, depreciation on equipment, insurance, advertising, and any other operating costs—and add them all together. If Rocky’s Day Spa is a service business with no cost of goods sold, exclude COGS and focus on operating expenses. All non-operating costs (like interest) are typically included in total expenses unless the problem specifically separates operating from non-operating items. The correct answer reflects the exact total of these expense items combined, which is why it’s the best choice.

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