Why Do Decreases in Company Profitability Decrease in Direct Proportion

question 31

Multiple Choice

Why do decreases in company profitability decrease in direct proportion to the payroll expenses?

• A) Because payroll represents a liability and an expense of the business.The higher payroll expenses are,the lower the profitability will be.
• B) Because payroll represents an asset and an income of the business.The higher payroll income are,the higher the profitability will be.
• C) Because payroll represents a liability and an expense of the business.The lower payroll expenses are,the lower the profitability will be.
• D) Because payroll represents an asset and an income of the business.The lower the payroll expenses are,the higher the profitability will be.