Business Profit Is

question 24

Multiple Choice

Business profit is:

• A) the residual of sales revenue minus the explicit accounting costs of doing business.
• B) a normal rate of return.
• C) economic profit.
• D) the return on stockholders' equity.

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Definitions:

Depreciation Expense

The allocation of a tangible asset's cost over its useful life to account for declines in value over time.

Salvage Value

The anticipated recovery value of an asset when it no longer has usable life.

Straight-Line Method

A method of calculating depreciation by evenly allocating the cost of an asset minus its salvage value over its estimated useful life.

Office Furniture

Items and fixtures used in an office setting for the purpose of work, including desks, chairs, and file cabinets.