Which of the following transactions will not decrease the net profit margin ratio?
A)Accruing interest expense at year-end.
B)The recording of depreciation expense.
C)Using cash to pay for previously accrued wages.
D)Accruing utilities expense at year-end.

Question

Quizplus · Accepted Answer

Using cash to pay for previously accrued wages will not affect the net profit margin ratio as it is simply a payment of an expense that has already been recorded. Whereas accruing interest expense, depreciation expense, and utilities expense will all decrease the net profit margin ratio, as they are expenses that directly reduce the profit earned by the company.

Which of the Following Transactions Will Not Decrease the Net