A Summary of Operating Events Is Found

question 3

Multiple Choice

A summary of operating events is found

• A)only in the asset section of the balance sheet.
• B)only in the cash flows from operations section of the cash flow statement.
• C)only in the income statement.
• D)in the cash flows from operations section of the cash flow statement, and in the income statement.

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Definitions:

Net Operating Income

A financial metric that calculates a company's income after operating expenses are deducted, but before interest and taxes.

Absorption Costing

A method of inventory costing in which all costs of production (both fixed and variable) are treated as product costs.

Gross Margin

Gross margin is the difference between revenue and the cost of goods sold, divided by revenue, expressed as a percentage. It measures how much a company earns taking into consideration the costs that it incurs for producing its products or services.

Variable Costing

An accounting method that includes only variable costs—costs that change with production levels—in the calculation of cost of goods sold and excludes fixed costs.