Which of the following does not correctly describe the effect of recording a credit sale of inventory for a profit?
A) The receivables turnover ratio decreases.
B) Current assets increase.
C)Gross profit increases.
D)Operating expenses increase.

Question

Quizplus · Accepted Answer

Recording a credit sale of inventory for a profit does not increase operating expenses. Operating expenses are related to the costs incurred in the day-to-day operations of a business, and they are not affected by sales of inventory.

Which of the Following Does Not Correctly Describe the Effect