Net Income Occurs When Revenues Exceed Expenses

question 239

True/False

Net income occurs when revenues exceed expenses.

Grasp the concept of recognizing unrealized gains or losses and their reporting.

Understand the implications of dividends on investments and equity earnings calculations.

Know how to adjust the available-for-sale security portfolio to fair value and its reporting on financial statements.

Calculate the changes in Retained Earnings due to investments and dividends.

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Definitions:

Need Motivation Theories

Psychological theories that propose people are motivated by the desire to fulfill basic needs such as safety, belonging, and self-esteem.

Content Theories

Theories that explain why people have different needs at different times and how these needs motivate behavior, such as Maslow’s hierarchy of needs, Alderfer’s ERG theory, McClelland’s need theory, and Herzberg’s two-factor theory.

Process Theories

Theories that describe the cognitive processes through which needs are translated into behavior, such as equity theory, expectancy theory, and goal-setting theory.

Motivation

Motivation is the internal drive or external stimulus that prompts an individual to take action toward achieving a goal.