One of Hawk Company's Customers Returned Products That Cost Hawk

Multiple Choice

One of Hawk Company's customers returned products that cost Hawk $300, which was sold on account for $450. Which of the following does not correctly describe the effect of the return on the financial statements?

A) Gross profit decreases $150.
B) Total current assets decrease $150.
C) Sales returns and allowances increase $150.
D) Operating expenses increase $150.