Which of the Following Statements Is False When a Company

question 115

Multiple Choice

Which of the following statements is false when a company sells inventory costing $900 for $1,500 cash?

• A)Current assets increase $600.
• B)Gross profit increases $1,500.
• C)Stockholders' equity increases $600.
• D)Net sales increases $1,500.

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Definitions:

Fixed Expense

Fixed expenses are costs that do not change with the level of production or sales volume, such as rent or salaries.

Target Profit

The target profit a business seeks to reach over a defined timeframe.

Unit Sales

The quantity of items or products sold, not taking into account the selling price or revenue generated.

Variable Cost

Costs that change in proportion to the level of production or sales volume.