Looking at the Components of the Income Approach We See

question 253

Multiple Choice

Looking at the components of the income approach we see that

• A) compensation of employees is the largest category.
• B) consumption is the largest category.
• C) profits are the largest category.
• D) rental income is the largest category.

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Definitions:

Operating Activities

Activities directly related to the core business operations of a company, including sales, service, and production.

Prepaid Expenses

Payments made in advance for goods or services to be received in the future.

Income Taxes Payable

The amount of income tax a company owes to the government but has not yet paid, reflected as a liability on the balance sheet.

Operating Activities

are the day-to-day functions of a business that involve the production, sales, and delivery of a company's products and services.