Which of the following correctly describes the following journal entry?
A)The gross profit does not change.
B)Net income decreases.
C)Current assets increase.
D)Net sales increases.

Question

Which of the following correctly describes the following journal entry? 
A)The gross profit does not change. 
B)Net income decreases. 
C)Current assets increase. 
D)Net sales increases.

Quizplus · Accepted Answer

Without further information, it is impossible to determine the exact nature of the journal entry. However, if net income decreases, it could be due to expenses increasing or sales decreasing. Therefore, option B is the best choice. The other options cannot be definitively determined without more information.

Which of the Following Correctly Describes the Following Journal Entry