In an Accrual-Based Transactional Approach, Net Income Is Typically Defined

question 85

Multiple Choice

In an accrual-based transactional approach, net income is typically defined as

• A)Revenues - Expenses + Gains + Losses
• B)Revenues - Expenses
• C)Revenues - Expenses + Gains - Losses
• D)increase in net assets from nonowner transactions

Understand the concept of the operating cycle and its importance to a company’s cash flow.

Differentiate between various types of liabilities and their classification on a balance sheet.

Identify and differentiate between the major classifications of assets in a balance sheet.

Understand the ethical considerations related to accounting practices and policies.

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Definitions:

Adjusting Entries

Accounting entries made to adjust the books of accounts to reflect the true financial position and performance of a company at the end of a financial period.

Salaries Expense

The total amount recorded by a company for the salaries of its employees.

Salaries Payable

An account reflecting the debts to workers for performed but unpaid work.

Closing Entry

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, ultimately resetting the balances of temporary accounts to zero.