An Income Statement May Be Represented as Follows

question 69

Multiple Choice

An income statement may be represented as follows:

• A) Sales - Liabilities = Profits.
• B) Revenues - Liabilities = Net Income.
• C) Sales - Expenses = Retained Earnings.
• D) Sales - Expenses = Profits.

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Definitions:

Cash Inflows

Money received by a business from various sources, including sales, investments, financing, and more.

Cash Operating Costs

Expenses directly associated with the operation of a business that require cash outlay, including rent, utilities, and payroll.

Useful Life

The estimated duration of time an asset is expected to be economically useful to an entity.

Simple Rate

A basic interest rate or return percentage applied to an investment or loan without compounding over a specific period.