Which one of the following statements is correct assuming accrual accounting is used? A) The addition to retained earnings is equal to net income plus dividends paid.
B) Credit sales are recorded on the income statement when the cash from the sale is collected.
C) The labor costs for producing a product are expensed when the product is sold.
D) Interest is a non-cash expense.
E) Depreciation increases the marginal tax rate.

C)The labor costs for producing a product are expensed when the product is sold.

Explanation:

An income statement can be regarded as profit and loss account, it is a financial statements of a particular firm that gives the revenue as well as expenses of the firm during a specific period, it usually shows the way the revenue is been changed into net income. It should be noted that The labor costs for producing a product are expensed when the product is sold, assuming accrual accounting is used

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