What Is a Firm's Net Income

question 63

Multiple Choice

What is a firm's net income?

• A)earnings before interest and taxes are deducted
• B)the third line of an income statement that represents the difference between sales revenues and costs
• C)a measure of the firm's profitability over a given period
• D)net sales less cost of sales
• E)earnings after interest is deducted but before taxes are deducted

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Definitions:

Assignment

The transfer of rights or property from one party to another, often used in reference to contracts or leases.

Doctrine of Privity

A legal principle stating that only the parties to a contract can sue or be sued on the contract's terms.

Leading Cases

Landmark court decisions that establish significant new legal principles or concepts or significantly change the interpretation of existing laws.

Contract

A legally binding agreement between two or more parties that specifies obligations and rights concerning particular terms.