Examples of functional areas of the income statement are sales, gross profit, and net income. cost of sales, administrative activities, and selling activities. wages expenses, depreciation, and rent expense. gross profit, operating income, and net income. On September 1, Duval Enterprises collected rent for 3 months in advance. The total collected was $1,200. How much rent revenue should Duval recognize for the month of September? $1,200 $ 300 $ 600 $ 400 Under the contract base approach, when management estimates the extent of expected returns as a form of variable consideration, the company must establish a(n): Warranty expense account Returns and allowances account Refund liability account Warranty liability account The difference between gross profit and the company's operating expenses is sales revenue. gross profit. operating income. net income. For a contract to exist all of the following criteria must be met, except for it has been approved and the parties are committed to their obligations a contractual commitment in the form of a deposit it must have commercial substance it is legally enforceable