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.

---

Definitions:

Agency Shops

Workplaces where employees must pay union dues regardless of their membership status, often found in collective bargaining agreements.

Union Shops

Workplaces where all employees must join a union within a certain time period after being hired.

Right-To-Work Laws

Legislation that prohibits compulsory membership in labor unions as a condition of employment.

Exit Mechanism

The method of resolving workplace dissatisfaction by quitting one’s job and searching for another.