Which of the Following Transactions Involves an Accrued Asset

question 140

Multiple Choice

Which of the following transactions involves an accrued asset?

• A)Wages earned by employees but not yet paid
• B)Rent collected in advance from a tenant
• C)Rent owed by a tenant but not yet collected
• D)One year's premium on life insurance policy paid in advance

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating financial performance over a period.

Operating Income

The profit realized from a business's normal operational activities, calculated before tax by subtracting operating expenses from gross profit.

Gross Profit

The financial performance metric that subtracts the cost of goods sold (COGS) from revenue, indicating how efficiently a company produces or sources its products.

Gross Margin

The difference between sales revenue and cost of goods sold, shown as a value or percentage, indicating the efficiency of sales relative to production costs.