An Asset-Expense Relationship Exists with

question 41

Multiple Choice

An asset-expense relationship exists with

• A) liability accounts.
• B) revenue accounts.
• C) prepaid expense adjusting entries.
• D) accrued expense adjusting entries.

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Definitions:

Net Operating Income

A measure of a company’s profitability, calculated as revenues less operating expenses excluding taxes and interest.

Traceable Fixed Expense

A fixed cost that can be directly linked to a specific segment of the business and would be eliminated if the segment ceased operations.

Percentage Change

A calculation that shows how much a quantity has increased or decreased in percentage terms over a period.

Traceable Fixed Expense

Fixed costs that can be directly associated with a specific product, department, or segment of a business.