Under the Accrual Method,expenses Are Recognized When Revenue Is Earned

question 13

True/False

Under the accrual method,expenses are recognized when revenue is earned.

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Definitions:

Contribution Margin Ratio

The ratio of contribution margin (sales minus variable costs) to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and profit.

Operating Income

Operating income, similar to income from operations, is the profit earned from a firm's normal core business operations.

Variable Costs

Costs that vary directly with the level of production or sales activity.

Operating Income

Income from a company's main business operations, excluding expenses and revenues from non-operational activities.