Which one of the following statements is correct?
A)Pretax income is equal to gross profit minus interest expense.
B)Gross profit is equal to sales minus costs of goods sold and depreciation.
C)Operating expenses are indirect costs.
D)Costs that vary directly with production are classified as operating expenses.
E)The change in retained earnings is equal to net income plus dividends paid.

Question

Quizplus · Accepted Answer

Operating expenses are indeed considered indirect costs, as they are not directly tied to the production of goods or services but are necessary for the day-to-day functioning of a business. These can include costs such as rent, utilities, and administrative salaries.

Which One of the Following Statements Is Correct