Question

1. Which of the following is likely to be the largest?

A.) Cost of revenues

B.) Selling, General & Administrative

C.) Amortization of Intangibles

D.) Research & Development

2. Which of the following are non-cash expenses?

A.) Cost of revenues

B.) Selling, General & Administrative

C.) Amortization of Intangibles

D.) Research & Development

3. Which accounts may include depreciation?

A.) Cost of Goods Sold

B.) Selling, General & Administrative

C.) Research & Development

D.) All of the above

Answer 1

1. Correct answer is Option (A) Cost of revenue.

The direct expense are found to be higher compared to other indirect expenses. The Amortization, Selling expense, Administration expense etc. Are found to be lower comparatively.

2. Correct answer is (C) Amortization of Intangible

The Amortization is a noncash expense. The value of it is amortized over the period of useful life based on the appropriate ratio which matches the usage or benefit arising. It doesn't involve cash outflow like depreciation. All others involve cash outflow.

3. Correct answer is (B) Selling, General and Administrativ

The depreciation may be included in this category. It is neither cost of revenue item nor Research and development. The depreciation is an indirect expense and an administrative item.