Decreases in Stockholders' Equity That Are Due to the Cost

question 30

Multiple Choice

Decreases in stockholders' equity that are due to the cost of operating the business are:

• A)assets.
• B)revenues.
• C)expenses.
• D)liabilities.

---

Definitions:

Estimated Cost

An approximation of the cost to produce a product, start a project, or execute a plan, often used in budgeting and planning.

Gross Profit Method

An accounting technique used to estimate inventory levels and cost of goods sold, calculated as sales minus the cost of goods sold.

Estimated Gross Profit Rate

A projected figure that calculates the percentage of gross profit to sales, used for analyzing a company's financial health.

Inventory Turnover

A metric that indicates how many times a company’s inventory is sold and replaced over a specific period.