Which of the Following Is True Regarding the Term Residual

question 12

Multiple Choice

Which of the following is true regarding the term residual income?

• A)Residual income is the income over and above the amount needed to cover current expenses.
• B)Residual income is the income in excess of a charge for the capital that is employed to generate that income.
• C)Residual income is equal to economic income.
• D)Residual income is called abnormal earnings when applied to the enterprise's operating income and invested capital.