Expenses Are Incurred

question 63

Multiple Choice

Expenses are incurred

• A) to produce liabilities.
• B) only on rare occasions.
• C) to produce assets.
• D) to generate revenues.

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Definitions:

EBIT

Excluding interest and tax payments, Earnings Before Interest and Taxes provides an assessment of a firm's economic performance.

Leverage

The use of borrowed money (debt) to amplify the potential return on investment.

EAT

Earnings After Tax, which refers to the net profit a company makes after deducting all its costs, including taxes.

Gross Margin

The difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage.