Mama June Pizza Company determined that dough, sauce, cheese and other ingredients costing $8,700 were used to make pizzas during July. Which of the following statements is false with respect to the use of the ingredients?

Question

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The use of ingredients would not result in a debit to the Supplies account. It would result in a debit to the Cost of Goods Sold account. Choice A is true because the Cost of Goods Sold account would be debited for the cost of the ingredients used. Choice B is false because the use of ingredients would not directly affect operating expenses. Choice C is false because the use of ingredients would not necessarily decrease operating income, as it depends on the revenue generated from the sale of the pizzas.

Mama June Pizza Company Determined That Dough, Sauce, Cheese and Other