A decrease in Rent Expense results in a decrease in gross profit.

Name: A decrease in Rent Expense results in a decrease in gross profit.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Rent expense is an operating expense and does not directly affect gross profit, which is calculated by deducting cost of goods sold from revenue. A decrease in rent expense will lead to an increase in net income, but the impact on gross profit will depend on the level of cost of goods sold.

A Decrease in Rent Expense Results in a Decrease in Gross