Net Income Is

question 142

Multiple Choice

Net income is:

• A) equal to cash flow
• B) profits remaining after income taxes are paid
• C) unavailable to the owners of the business
• D) net profit before taxes plus depreciation

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Definitions:

Overproduction

The creation of more products or goods than are needed, leading to excess inventory and potential waste.

Variable Costing

An accounting approach that solely accounts for variable production expenses like direct materials, direct labor, and variable manufacturing overhead in the calculation of product costs.

Limitations

The constraints or restrictions that hinder a process, investigation, or analysis.

Break-even

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and the company has "broken even" on an investment or product.