Which of the Following Is True of Net Income

question 179

Multiple Choice

Which of the following is true of net income?

• A) Net income is operating income divided by income tax rate.
• B) Net income is operating income plus operating revenues minus operating costs minus income taxes.
• C) Net income is operating income plus nonoperating revenues minus nonoperating costs minus income taxes.
• D) Net income is operating income minus nonoperating revenues minus nonoperating costs minus sales taxes.

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Definitions:

Short Run

A period in economics during which at least one input, such as plant size or capital, is fixed and cannot be changed.

Variable Costs

Variable costs are expenses that change in proportion to the activity or volume of business, such as materials and labor costs.

Fixed Inputs

Resources used in production that cannot be easily increased or decreased in a short period.

Marginal Cost

The cost of producing an additional unit of a good or service.