Net Income Is Equal to Which One of the Following

question 30

Multiple Choice

Net income is equal to which one of the following?

• A)operating income plus interest expense minus taxes
• B)gross profit minus depreciation and interest expense
• C)pretax income plus income taxes
• D)dividends plus the change in retained earnings
• E)pretax income minus taxes and dividends

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Definitions:

Pro-Rated

Adjusted according to a certain rate, portion, or amount. Often used for payments or charges that are calculated based on usage or time period within a full billing cycle.

Fixed Expenses

Expenses that do not change based on the quantity produced, such as furniture or machinery.

Variable Expenses

Costs that change in amount from period to period, fluctuating with usage levels, economic conditions, or personal choice.

Piecewise Function

Also called a split function; it gives a set of rules for each domain of the function; c(x) is computed differently depending on the value of x.