It assumes we divide the long life of a business into a series of shorter time periods for accounting and reporting purposes. Which of the following costs is most likely to be the largest expense reported on the income statement of a merchandiser such as Wal-Mart? Salaries expense Cost of goods sold Advertising Expense Income tax expense Which of the following is not reported as an operating expense on the income statement? Salaries expense Rent Expense Interest Expense Advertising Expense Which of the following statements does not correctly describe the relationship between the income statement and the ending retained earnings balance? Net income increases the ending balance of retained earnings. A net loss decreases the ending retained earnings balance. A net loss does not affect the ending retained earnings balance. Net income and net loss both affect the ending retained earnings balance