A Business That Is Created by Separating Parts of an Operating

question 88

Multiple Choice

A business that is created by separating parts of an operating business into a separate entity is called a:

• A) synergy.
• B) franchise.
• C) spin-off.
• D) turnkey project.

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Definitions:

Gross Profit Rate

A profitability ratio that compares gross profit to net sales, reflecting the efficiency of a company in managing its production and labor costs.

Multiple-Step Income Statement

An income statement that separates operating revenues and expenses from non-operating items to display key components of net income.

Sales Revenue

The gross income from selling products or services, prior to deducting any costs.

FOB Shipping Point

A shipping term indicating that the buyer is responsible for the goods and the shipping cost as soon as the goods leave the seller's premises.