Which of the Following Equations Is True

question 144

Multiple Choice

Which of the following equations is true?

• A) Contribution margin = Sales revenue × Variable cost ratio
• B) Contribution margin ratio = Contribution margin / Variable costs
• C) Contribution margin = Fixed costs
• D) Contribution margin ratio = 1 − Variable cost ratio

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Definitions:

Income Statements

Financial statements detailing a company's revenues, expenses, and profits over a specific period, highlighting operational performance.

Adjusted Trial Balance

A list of all accounts and their balances after adjusting entries have been made, serving as a check that the total debits equal the total credits before financial statements are prepared.

Accrued Fees

Fees that have been incurred but not yet paid, representing a liability on the balance sheet until they are settled.

Journalized

The act of recording a transaction in an accounting journal.