Which One of the Following Statements Is Correct

question 72

Multiple Choice

Which one of the following statements is correct?

• A)Pretax income is equal to gross profit minus interest expense.
• B)Gross profit is equal to sales minus costs of goods sold and depreciation.
• C)Operating expenses are indirect costs.
• D)Costs that vary directly with production are classified as operating expenses.
• E)The change in retained earnings is equal to net income plus dividends paid.

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Definitions:

Common Reaction

A typical or widespread response or behavior that people exhibit in a specific situation.

Concern

Concern refers to a feeling of worry or care about a particular issue or situation, often prompting individuals to take action or seek solutions.

Creative Thinking

The ability to think in novel and unconventional ways in order to come up with unique solutions to problems or to generate original ideas.

Dominant Response Tendency

The inclination to respond in the most familiar or likely way in any given situation, especially under stress or pressure.