Which of the Statements Below Indicates That a Company Earned

question 97

Multiple Choice

Which of the statements below indicates that a company earned a net income for the period?

• A) The sum of the credits exceeds the sum of the debits in the Balance Sheet columns on the work sheet.
• B) The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet.
• C) The sum of the debits exceeds the sum of the credits in the Income Statement columns on the work sheet.
• D) Cash inflows exceeded cash outflows.

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Definitions:

Profitable Output

The level of production at which a business or entity maximizes its profit, considering its cost structure and market demand.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services to make a profit.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing the additional gain beyond the normal profit level.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production rather than earning income elsewhere.