Net Income Is Equal To

question 13

Multiple Choice

Net income is equal to:

• A) Assets minus Liabilities
• B) Revenues and Gains minus Expenses and Losses
• C) Shareholders' Equity minus Assets
• D) Revenues and Assets minus Expenses and Liabilities

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Definitions:

Cost Formula

An equation or method used to determine the total cost of producing goods or services, combining fixed costs, variable costs, and sometimes semi-variable costs.

Variable Selling Expenses

Costs that vary directly with the volume of sales, such as commissions and shipping fees.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is available to cover fixed expenses and to contribute to profit.

Variable Administrative Expenses

Costs that vary in proportion to changes in an organization's activity level, such as sales commissions.