The Amount of Net Income Is Transferred from ________ to ________

question 105

Multiple Choice

The amount of net income is transferred from ________ to ________.

• A)the income statement; the statement of retained earnings
• B)the balance sheet; the of cash flow
• C)the balance sheet; the income statement
• D)the income; the statement of expenditures

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Definitions:

EBIT

A financial metric, Earnings Before Interest and Taxes, calculates a business's income by including all earnings and expenditures with the exception of those from interest and taxes.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the percentage of fixed to variable costs a company has.

Variable Expenses

Costs that vary directly and proportionately with changes in production volume or business activity.

Fixed

Refers to an interest rate or investment that remains constant and does not fluctuate over a specified period.