Which of the Following Is the Formula to Calculate Residual

question 14

Multiple Choice

Which of the following is the formula to calculate residual income?

• A)Operating income - average assets
• B)Operating income plus interest and depreciation expense
• C)Operating income - (average assets × required minimum rate of return)
• D)Operating income - (average assets + required minimum rate of return)

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Definitions:

Petty Cash Fund

A minor sum of money maintained in reserve to cover minor, immediate costs.

Cash Over and Short

An account that records discrepancies between actual cash received and the expected amount, reflecting errors or theft.

Petty Cash Fund

A small amount of cash kept on hand for making immediate payments for miscellaneous, small expenses.

Expense Accounts

Categories within financial accounting where expenses are recorded and tracked.