Operating Expenses Are Subtracted from Revenue for a Service Company

question 95

True/False

Operating expenses are subtracted from revenue for a service company and from gross profit for a merchandising company.

---

Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows in a given period.

Tax Rate

The percentage at which income or financial transactions are taxed by a government.

Cash Inflows

Money received by a business from its various activities, like sale of goods, services, or obtaining a loan.

Cash Outflows

The movement of money out of a business as expenditures, payments, or investments, which reduce the company's cash balance.