Which of the Following Expressions Is Incorrect

question 211

Multiple Choice

Which of the following expressions is incorrect?

• A) Gross profit - operating expenses = net income
• B) Sales - cost of goods sold - operating expenses = net income
• C) Net income + operating expenses = gross profit
• D) Operating expenses - cost of goods sold = gross profit

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Definitions:

Weekly Payroll

The total sum of all employee earnings paid on a weekly basis.

Supplies on Account

Supplies purchased by a company on credit, for which payment will be made at a later date, increasing accounts payable.

Historical Cost

The original monetary value of an asset or liability, recorded at the time of its acquisition or incurrence.

Fair Values

The estimated price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.