Which of the Following Expenses Incurred by the Sporting Goods

question 64

Multiple Choice

Which of the following expenses incurred by the sporting goods department of a department store is a direct expense?

• A) Depreciation expense--office equipment
• B) Insurance on inventory of sporting goods
• C) Uncollectible accounts expense
• D) Office salaries

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Definitions:

Net Income

The profit remaining after all expenses, taxes, and costs have been subtracted from total revenue.

Variable Expenses

Costs that vary in direct proportion to changes in an organization's activity level or volume of output.

Operating Leverage

A measure of how sensitive net operating income is to a given percentage change in dollar sales.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.