The Dairy Diner's Profits Are Down from the Previous Quarter

question 79

Multiple Choice

The Dairy Diner's profits are down from the previous quarter. Which of the following would NOT be an explanation for the decrease in profits?

• A) sales revenues stayed the same while expenses decreased
• B) sales revenues stayed the same while expenses increased
• C) sales revenues decreased while expenses stayed the same
• D) sales revenues were less than expenses

---

Definitions:

Unearned Revenues

Unearned revenues refer to money received by a company for goods or services that have not yet been provided to the customer.

Liability

A financial obligation or debt owed by an individual or company to another entity, requiring the transfer of resources at a future date.

Credits

An accounting entry that increases liabilities or equity or decreases assets on a company's balance sheet.

Debits

Debits are accounting entries that increase asset or expense accounts, or decrease liability, equity, or revenue accounts, typically noted on the left side of accounting ledgers.