Profit Is

question 21

Multiple Choice

Profit is:

• A) an ideal measure of the 'well-offness' of a firm because income and expenses are clearly defined.
• B) only a measure of financial performance and therefore not useful in decision-making.
• C) directly affected by the accounting policy choices implemented by management.
• D) comparable across all firms as it is simply calculated by subtracting expense from revenues.

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Definitions:

Police Power

The capacity of a state to regulate behaviors and enforce order within its territory, mainly in areas concerning health, safety, and morals.

General Revenue Sharing

A form of federal monetary aid that is given to states and municipalities with minimal restrictions on how it can be spent.

Means Testing

A procedure to determine eligibility for certain forms of financial aid or social services based on the income and assets of an applicant.

Indexing

The practice of adjusting financial figures or static amounts by a designated benchmark or index to reflect changes in economic indicators.