The Approach Where Profit Is Measured as the Revenue from Operations

question 12

Multiple Choice

The approach where profit is measured as the revenue from operations minus expenses from operations is known as:

• A) the all-inclusive approach
• B) the operating-profit approach
• C) the comprehensive income approach
• D) the working profit approach

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Definitions:

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life, after deducting the cost of disposal.

Service Life

The expected duration or period an asset is considered useful and productive for its intended purpose.

Impairment Loss

A reduction in the recoverable value of an asset, below its carrying amount on the balance sheet, leading to a write-down of the asset's value.