Which One of the Following Accounts Is Least Likely to Vary

question 6

Multiple Choice

Which one of the following accounts is least likely to vary directly with the level of sales?

• A)accounts payable
• B)inventory
• C)cost of goods sold
• D)interest expense
• E)accounts receivable

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Definitions:

Direct Method

A method for preparing the cash flow statement that lists major classes of gross cash receipts and payments.

Income Tax Expense

The cost associated with the taxes on a company's taxable income, reflecting the amount of income tax a company expects to pay to the government.

Income Taxes Payable

The sum of income tax that a corporation is liable to pay to the government but has not paid so far.

Cash Payments

Transactions involving the transfer of cash from one entity to another as a form of compensation or settlement.