Question

Which of the following businesses would most likely not report cost of goods sold on their income statement?

A.A law firm
B.An automobile dealership
C.A pizza restaurant
D.A computer chip manufacturer

Answer 1

A law firm would likely not report cost of goods sold on their income statement, as it provides services rather than selling physical goods, unlike an automobile dealership, a pizza restaurant, or a computer chip manufacturer.

Step-by-step explanation:

The business that would most likely not report cost of goods sold on their income statement is A law firm. This is because a law firm provides professional services rather than physical goods; therefore, it does not incur costs associated with producing or purchasing goods for resale. An automobile dealership, a pizza restaurant, and a computer chip manufacturer all deal with physical products, which means they incur costs related to acquiring or producing those goods, making CoGS a relevant and necessary component of their financial statements.