Operating Income Reflects

question 128

Multiple Choice

Operating income reflects:

• A)income from a company's main and secondary business activities.
• B)earnings from a company's core business activities.
• C)earnings from a company 's core business activities which includes interest income.
• D)an important measure that investors to use to evaluate the liquidity of the business.

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Definitions:

Cash

A company's most liquid asset, representing currency or assets that can be immediately converted into currency.

Sales Tax Payable

A liability account that represents the sales tax collected from customers by a selling entity and owed to the tax authority.

Cash

Money in the form of currency, which includes bills, coins, and money in bank accounts that is available for immediate use.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operational cycle.