Net Income Does Not Appear in the Numerator of the

question 26

Multiple Choice

Net income does not appear in the numerator of the

• A) profit margin.
• B) return on assets.
• C) return on common stockholders' equity.
• D) payout ratio.

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Definitions:

Company Books

Official records maintained by a business documenting its financial transactions and activities.

Outstanding Checks

Checks that have been issued and recorded in a company's financial records but have not yet been cashed or cleared by the bank.

NSF

An acronym for "Non-Sufficient Funds," indicating that a check cannot be processed due to insufficient money in the account.

Bank Reconciliation

The process of comparing and adjusting a company's financial records to match the transactions recorded by the bank, ensuring accuracy in the accounts.