On a Projected Income Statement, a Business Owner's Target Income

question 93

True/False

On a projected income statement, a business owner's target income is the sum of a reasonable salary for the time spent running the business and a normal return on the amount the owner has invested in it.

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Definitions:

Dividends Payable

This refers to the amount of declared dividends owed by a company to its shareholders but has not yet been paid out.

Stockholders

Individuals or entities that own shares in a corporation, giving them a partial ownership interest in the company.

Accumulated Depreciation

is the total amount of depreciation expense that has been recorded for a fixed asset since it was put into use.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment, and financial activities.