Which of the Following Equations Is CORRECT

question 38

Multiple Choice

Which of the following equations is CORRECT?

• A) Sales revenues = Variable expenses - (Fixed expenses + Operating income)
• B) Sales revenues - Variable expenses - Fixed expenses = Operating income
• C) Sales revenues + Variable expenses + Fixed expenses = Operating income
• D) Sales revenues - Fixed expenses = Variable expenses - Operating income

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Definitions:

Agency

A relationship where one party, the agent, is authorized to act on behalf of another, the principal, in dealings with third parties.

Necessity

The condition or situation of being required or indispensable, often invoked in legal contexts where actions are taken out of an unavoidable need.

Contract

A legally binding agreement between two or more parties.

Warranty of Authority

An assurance provided by an agent to a third party that they have the authority to act on behalf of another person or entity in a legal or business transaction.