Which One of the Following Correctly Represents One of the Basic

question 180

Multiple Choice

Which one of the following correctly represents one of the basic financial statement models?

• A)Assets - Liabilities = Net Income
• B)Assets + Liabilities = Total Assets
• C)Revenues + Expenses = Net Income
• D)Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings

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Definitions:

Profit Margin

A financial metric expressing the percentage of revenue that remains as profit after all operating expenses are deducted.

Return on Investment

A financial metric used to measure the efficiency of an investment, calculated by dividing the profit gained from the investment by its cost.

Residual Income

The amount of income that an individual has after all personal debts and expenses have been paid, often used in corporate finance to measure the excess of actual profit over the expected return on investment.

Operating Income

Earnings from a company's core business operations, excluding costs and revenues from financing and investments.