Net Income Before Taxes Is Found by Deducting Total Operating

question 43

True/False

Net income before taxes is found by deducting total operating expenses from gross profit.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profitability from its operations.

Variable Costing

An accounting method that assigns only variable production costs to products, treating fixed costs as period costs.

Absorption Costing

An accounting method that includes all manufacturing costs (fixed and variable) in the cost of a product.

Operating Income

Income generated from regular business operations, excluding deductions of interest and taxes.