Residual Income Is the Difference Between Revenues and Expenses

question 71

True/False

Residual income is the difference between revenues and expenses.

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out to shareholders as dividends. These funds are often reinvested in the business.

Net Capital Spending

The total spending on fixed assets minus the proceeds from the sale of fixed assets over a period.

Canadian GAAP

Generally Accepted Accounting Principles in Canada, a set of accounting standards for financial reporting by Canadian companies.