Which of the Following Statements Does Not Accurately Describe the Effect

question 117

Multiple Choice

Which of the following statements does not accurately describe the effect of the sale of inventory at a profit on the financial statements?

• A)Income from operations and current assets both increase.
• B)Operating income and gross profit both increase.
• C)Net income and earnings per share both increase.
• D)Current assets do not change and stockholders' equity increases.

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Definitions:

Period

A length of time in financial reporting, often quarterly or annually, used to evaluate business performance.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including labor, material, and overhead costs.

Raw Materials

Basic materials and substances used in the initial stages of production before transformation into finished goods.

Compute

The process of using mathematical operations to obtain a result or solve a problem.