Which of the following does not correctly describe the effect of a journal entry involving the recording of a credit card discount?
A) Net sales decrease and gross profit decreases.
B) Net sales decrease and net income decreases.
C)Operating expenses remain the same and net income decreases.
D)Neither operating expenses, nor net income is affecteD.The journal entry includes a debit to credit card discount, which is a contra-revenue account and therefore reduces net sales, gross profit, and net income.

Question

Quizplus · Accepted Answer

Recording a credit card discount reduces net sales, which in turn decreases both gross profit and net income. Operating expenses remain unaffected by this entry.

Which of the Following Does Not Correctly Describe the Effect