If an Organization Wants to Make a Profit,it Must Generate

question 167

Multiple Choice

If an organization wants to make a profit,it must generate more sales revenue than the total costs it incurs.Which of the following is not a correct expression of the profit equation?

• A)Operating income = Sales revenue - Total variable costs - Total fixed costs
• B)Operating income = Sales revenue - Discretionary costs - Fixed costs
• C)Operating income = [Sales price per unit - Variable cost per unit x # units sold] - Fixed cost
• D)Operating income = [Contribution margin per

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Definitions:

Adjusted Trial Balance

A list of all accounts and their final balances after all end-of-period adjusting entries have been made, used to prepare financial statements.

Revenue Recognition

The accounting principle that determines the specific conditions under which revenue is recognized and recorded in financial statements.

Income Taxes

Taxes levied by the government on the income of individuals or corporations.

Adjusting Entries

Recordings at the period's end in accounting to accurately assign earnings and costs to the time they happened.